Quarterly report pursuant to Section 13 or 15(d)

NOTE 4: SIGNIFICANT ACCOUNTING POLICIES: Fair Value of Financial Instruments (Policies)

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NOTE 4: SIGNIFICANT ACCOUNTING POLICIES: Fair Value of Financial Instruments (Policies)
3 Months Ended
Mar. 31, 2019
Policies  
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

Effective January 1, 2008, the Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements established a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact the Company’s financial position or operating results but did expand certain disclosures.

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market date

Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

The Company recorded a change in FMV of trading securities as unrealized gain of $25,000 for the three months ended March 31, 2019. These securities are classified as trading.

 

The Company did not have any Level 2 or Level 3 assets or liabilities as of March 31, 2019, except for its convertible notes payable and derivative liability. The carrying amounts of these liabilities at March 31, 2019 approximate their respective fair value based on the Company’s incremental borrowing rate.

 

Cash is considered to be highly liquid and easily tradable as of March 31, 2019 and therefore classified as Level 1 within our fair value hierarchy.