Of all the questions we field on fair value measurement, the ones that come up most consistently center on Level 3. Which unobservable inputs actually belong in the disclosure table? How much detail does a nonpublic fund really have to provide? What changes when a position is written down to zero, or measured at NAV using the practical expedient? These are the details that get flagged in audit after audit, and they rarely get the standalone treatment they deserve.
Our complete guide to ASC 820 lays out the full fair value framework. But because the Level 3 unobservable input disclosures generate so many questions on their own, we asked our alternative investments specialists to build a focused supplement on exactly that topic.
The supplement below walks through what the Level 3 input table is meant to show, the accommodations available to nonpublic funds (and the disclosures that survive them), how to keep every significant input supportable and audit-ready, and the edge cases that most often cause problems, including recent transaction price and calibration, investments measured at NAV, and positions carried at a fair value of zero. It closes with documentation and year-end checklists your team can use before the audit begins.
Connect With Us
If you have questions about Level 3 disclosures, fair value measurement under ASC 820, or the services Richey May provides to the alternative investments industry, contact Steve Vlasak, Business Development Partner of the Alternative Investments practice.
