Quarterly report pursuant to Section 13 or 15(d)

NOTE 4: SIGNIFICANT ACCOUNTING POLICIES: Fair Value Measurements (Policies)

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NOTE 4: SIGNIFICANT ACCOUNTING POLICIES: Fair Value Measurements (Policies)
6 Months Ended
Jun. 30, 2019
Policies  
Fair Value Measurements

Fair Value Measurements

 

The Company applies the guidance that is codified under ASC 820-10 related to assets and liabilities recognized or disclosed in the financial statements at fair value on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The provisions of ASC 820-10 only apply to the Company’s investment securities, which are carried at fair value.

 

ASC 820-10 clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820-10 requires valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

 

Fair Value Hierarchy

Inputs to Fair Value Methodology

Level 1

Quoted prices in active markets for identical assets or liabilities

Level 2

Quoted prices for similar assets or liabilities; quoted markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the financial instrument; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from, or corroborated by, observable market information

Level 3

Pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption is unobservable or when the estimation of fair value requires significant management judgment

 

The Company categorizes a financial instrument in the fair value hierarchy based on the lowest level of input that is significant to its fair value measurement.

 

 

As of June 30, 2019

 

Quoted Market Prices in

Active Markets

(Level 1)

Internal Models with

Significant Observable

Market Parameters

(Level 2)

Internal Models with

Significant Unobservable

Market Parameters

(Level 3)

Total Fair Value

Reported in

Financial Statements

Marketable Securities

$288,400

$  -

$  -

$288,400

 

 

As of December 31, 2018

 

Quoted Market Prices in

Active Markets

(Level 1)

Internal Models with

Significant Observable

Market Parameters

(Level 2)

Internal Models with

Significant Unobservable

Market Parameters

(Level 3)

Total Fair Value

Reported in

Financial Statements

Marketable Securities

$150,000

$  -

$  -

$150,000

 

The Company recorded a change in FMV of trading securities as unrealized gain of $138,400 for the six months ended June 30, 2019. These securities are classified as trading.

 

The Company did not have any Level 2 or Level 3 assets or liabilities as of June 30, 2019, except for its convertible notes payable and derivative liability. The carrying amounts of these liabilities at June 30, 2019 approximate their respective fair value based on the Company’s incremental borrowing rate.

 

Cash is as of June 30, 2019 is classified as Level 1 within our fair value hierarchy.