Comment what is means of the phrase below:

1. Even when there is no observation market to provide pricing information about the transfer of liability or an entity own equity instrument, because contractual or other legal restriction prevent the transfer of such items). there might be an observable market for such item if they are held by other parties as assets (example, a corporate bond or a call option on an entity shares).

2. In all case, an entity shall maximize the use of relevant observable inputs and minimize the use of an unobservable input to meet the objective of fair value measurements, which is to estimate the price at which is orderly transaction to transfer the liability or equity instrument would take place between market participants at the measurement date under current market conditions.

3. When quote price of the transfer of identical or similar liability or entity owns equity instrument is not available and the identical item is held by another party as an asset, an equity shall measure the fair value of the liability or equity instrument from the perspective of a market participants then hold the identical items a s an assets at the measurement date.

4. The unit of account for the assets is not the same as for the liability or equity instrument. For example, for liabilities, in some case the price of an assets reflects a combined price for a package comprising both the amount due from the issuer and the third-party credit enhancement. if the unit of account for the liability is not for the combined package the objective is to measure the fair value of the issuer liability, not the fair value combine package. Thus, in such case, the entity would adjust the observed price of the assets to exclude the effect of the third- party credit enhancement.

5. non-performance risk.

The fair value of a liability reflects the effect of non- performance risk. Non- performance risk includes, but may be limited to, an entity own credit risk. Non- performance risk is assumed to be the same before and after the transfer of the liability.