Valuation techniques:
A) should use observable inputs.
B) cannot use unobservable inputs.
C) may use both observable and unobservable inputs.
D) None of the above.

Question

Quizplus · Accepted Answer

Valuation techniques may use both observable and unobservable inputs. While observable inputs are preferred, unobservable inputs may be necessary in certain circumstances, such as when valuing unique assets or companies. The use of unobservable inputs, also known as Level 3 inputs, must be clearly disclosed in financial statements and other disclosures.

Valuation Techniques