What is the fair value hierarchy?
Level 1: Uses quoted prices from active markets for identical assests to determine fair vale. This is the prefered method.
Level 2: Quoted prices from an active market for similar assets or quoted prices from less than active markets
Level 3: Covers unobservable inputs such as managements estimates of expected future cash flows or abnormal earnings, which are then used in valuation model approaches to fair value measurment.