COST Financial_Report

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Unformatted text preview: ble interest ra tes. See Notes 2, 3, a nd 4 for the ca rrying va lue a nd fa ir va lue of the Compa ny&#x2019 debt, respectively.</font></p> <p style=3D'MARGIN-TOP: 12px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny a ccounts for certa in a sets a nd lia bilities a t fa ir va lue. Fa ir va lue is defined a s the price tha t would be received to sell a n a sset or pa id to tra nsfer a lia bility (a n exit price) in a n orderly tra nsa ction between ma rket pa rticipa nts a t the mea surement da te. Fa ir va lue is estima ted by a pplying a fa ir va lue hiera rchy, which requires ma ximiz ing the use of observa ble inputs when mea suring fa ir va lue. The three levels of inputs a re:</font></p> <p style=3D'MARGIN-TOP: 6 px Quoted ma rket prices in a ctive ma rkets for identica l a ssets or lia bilities.</font></p> <p style=3D'MARGIN-TOP: 6 px Observa ble ma rket-ba sed inputs or unobserva ble inputs tha t a re corrobora ted by ma rket da ta .</font></p> <p style=3D'MARGIN-TOP: 6 px Significa nt unobserva ble inputs tha t a re not corrobora ted by ma rket da ta .</font></p> <p style=3D'MARGIN-TOP: 12px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny&#x2019 va lua tion techniques used to mea sure the fa ir va lue of money ma rket mutua l funds a re ba sed on quoted ma rket prices, such a s quoted net a sset va lues published by the fund a s supported in a n a ctive ma rket. Va lua tion methodologies used to mea sure the fa ir va lue of a ll other non-deriva tive fina ncia l instruments a re ba sed on &#x201C of industry-sta nda rd independent da ta providers or pricing tha t considers va rious a ssumptions, including time va lue, yield curve, vola tility fa ctors, credit sprea ds, defa ult ra tes, loss severity, current ma rket a nd contra ctua l prices for the underlying instruments or debt, broker a nd dea ler quotes, a s well a s other releva nt economic mea sures. All a re observa ble in the ma rket or ca n be derived principa lly from or corrobora ted by observa ble ma rket da ta , for which the Compa ny typica lly receives independent externa l va lua tion informa tion.</font></p> <p style=3D'MARGIN-TOP: 12px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny reports tra nsfers in a nd out of Levels 1, 2, a nd 3, a s a pplica ble, using the fa ir va lue of the individua l securities a s of the beginning of the reporting period in which the tra nsfer(s) occurred.</font></p> <p style=3D'MARGIN-TOP: 12px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny&#x2019 current fina ncia l lia bilities ha ve fa ir va lues tha t a pproxima te their ca rrying va lues. The Compa ny&#x2019 lia bilities consist of long-term debt, which is recorded on the ba la nce sheet a t issua nce price a nd a djusted for a ny a pplica ble una mortiz ed discounts or premiums.</font></p...
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