The California State University

CHAPTER 8.5.3 FAIR VALUE MEASUREMENT DISCLOSURE (FASB ASC 820-10-50)

INTERPRETATIONS AND EXAMPLES 03. Financial Assets – Receivables, Loans, and Securities Interpretations of Topic 820, “Fair Value Measurements and Disclosures” From Accounting Research Manager.

E-8. QUESTION: What are examples of the assets and liabilities that are likely to be in Level 2 and 3 categories?

RESPONSE: Examples of the assets and liabilities that are likely to be in Level 2 and 3 categories include:  Earn-out agreements;  Customer lists;  In-use assets;  Goodwill;  Patents and licenses;  Depreciable assets;  Amortizable intangible assets;  Debt obligations and loans outstanding;  Derivatives;  Financial instruments requiring risk adjustments; and  Financial instruments collateralized with assets with unobservable and (or) no active; and market to value the collateral.

Marketing-related intangible assets include:  Trademarks, trade names, service marks, collective marks, and certification marks;  Internet domain names;  Trade dress (unique color, shape, or package design);  Newspaper mastheads; and  Non-competition agreements.

8.05.3-1 GAAP Manual | Fair Value Measurement Disclosure | June 30, 2015 .

Customer-related intangible assets include:  Customer lists;  Order of production backlog;  Customer contracts and the related customer relationships; and  Non-contractual customer relationship.

Contract-based intangible assets include:  Licensing, royalty, and standstill agreements;  Advertising, construction, management, service, or supply contracts;  Lease agreements;  Construction permits;  Franchise agreements;  Operating and broadcasting rights;  Use rights such as drilling, water, air, mineral, timber-cutting, and route authorities;  Servicing contracts (e.g., mortgage servicing contracts); and  Employment contracts that are beneficial contracts from the perspective of the employer because the pricing of those contracts is below their current market value.

Technology-based intangible assets include:  Patented technology;  Computer software and mask works;  Unpatented technology;  Database; and  Trade secrets such as secret formulas, processes or recipes.

Artistic-related intangible assets include:  Plays, operas, and ballets;  Books, magazines, newspapers, and other literary work;  Musical works (e.g., compositions, song lyrics, and advertising jingles);  Pictures and photographs; and  Video and audiovisual material, including films, music videos, and television programs.

COMMON CLASSIFICATIONS IN THE FAIR VALUE HIERARCHY

LEVEL LEVEL ASSET OR LIABILITY – FAIR VALUE 1 LEVEL 2 3 Money market funds or certificates of deposit X X Derivatives X X X Loans X Corporate bonds X X X Debt securities available for sale, including collateralized debt X X X obligations and other asset-based securities Reverse purchase agreements X U.S. Treasury securities X X Sovereign debt X X Equity investments X X X Private equity investments X Nonperforming loans X Residual interest generated from sale of mortgage-backed X securities or receivables Mortgage or other loan servicing rights X Nonfinancial assets X

8.05.3-3 GAAP Manual | Fair Value Measurement Disclosure | June 30, 2015 .

REVISION CONTROL

Document Title: CHAPTER 8.5.3 – FAIR VALUE MEASUREMENT DISCLOSURE

REVISION AND APPROVAL HISTORY

Section(s) Summary of Revisions Revision Date Revised General Previously in Chapter 8.8 Attachment F April 2015