LOM 2023 Annual Report - Report - Page 44
LOM
2021 ANNUAL REPORT
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONTINUED
Income Approach Continued
Financial assets carried at fair value are classified and
disclosed in one of the following three categories:
•
•
•
Level 1 - Observable inputs that reflect quoted market
prices are available in active markets for identical assets
or liabilities as of the reporting date. The types of
investments in Level 1 include listed equities and monetary
gold.
Level 2 - Observable inputs, other than Level 1 prices, such
as quoted prices in active markets for similar assets and
liabilities, quoted prices for identical or similar assets and
liabilities in markets that are not active, or other inputs
that are observable or can be corroborated by observable
market data. Investments in this category include less
liquid and restricted equity securities and securities in
markets for which there are few transactions (inactive
markets).
Level 3 - Unobservable inputs that are supported by little
or no market activity and that are significant to the fair
value of the assets or liabilities. This includes certain
pricing models, discounted cash flow methodologies and
similar techniques that use significant unobservable inputs.
Investments in this category include investments in private
companies.
In certain cases, the inputs used to measure fair value may fall
into different levels of the fair value hierarchy. In such cases,
the assignment of the asset within the fair value hierarchy
is based on the lowest level of input that is significant to the
fair value measurement. The Company’s assessment of the
significance of a particular input to the fair value measurement
in its entirety requires judgment and considers factors specific
to the asset.
When determination is made to classify a financial instrument
within Level 3, the determination is based upon the lack of
significance of the observable parameters to the overall fair
value measurement. However, the fair value determination
for Level 3 financial instruments may include observable
components.
3. SECURITIES OWNED AND FAIR VALUE MEASUREMENTS
The following are the Company’s major categories of assets
measured at fair value on a recurring basis at December
31, 2021 and 2020, categorized by the ASC 820 fair value
hierarchy:
