Current Attempt in Progress

Alton Company holds an equity investment for which it needs to report fair value. The instrument is not actively traded, but its fair value can be estimated based on observable market data of similar instruments. According to the fair value hierarchy, at which level should this financial instrument be classified?

Level $1-$ Fair values based on quoted prices in active markets for identical assets or liabilities.

Level $3-$ Fair values based on unobservable inputs, reflecting the company's own assumptions about how market participants would price the asset or liability.

Level $4-$ Fair values based on historical cost adjusted for inflation or other market changes.

Level $2-$ Fair values based on observable market data, either directly or indirectly, for similar assets or liabilities.

Current Attempt in Progress

Jade Co$.$ holds an investment in private equity for which no quoted market prices are available. The investment's fair value is determined using a discounted cash flow model that includes assumptions about future cash flows and discount rates that are not readily observable in the market. This is an example of a $$ fair value estimate.

Level $1$

Level $3$

Level $4$

Level $2$