[Verse 1] When we value assets on the balance sheet We need a system that's complete Three levels guide us on our way To show how reliable our numbers are today Level One is crystal clear and bright Observable prices in plain sight Active markets tell us what it's worth The most reliable values here on earth [Chorus] One Two Three, that's the hierarchy Level One is what we see Level Two has some inputs we can trace Level Three takes modeling's embrace One Two Three, transparency's the key Higher levels mean less certainty Fair value tells the story true When we know which level we're looking through [Verse 2] Level Two steps back a bit from sight Still observable but not as bright Similar assets in the market space Or quoted prices with adjustments we can trace Interest rates and yield curves too These inputs help us value what we do More reliable than models we create But not as clear as Level One's estate [Chorus] One Two Three, that's the hierarchy Level One is what we see Level Two has some inputs we can trace Level Three takes modeling's embrace One Two Three, transparency's the key Higher levels mean less certainty Fair value tells the story true When we know which level we're looking through [Bridge] Level Three relies on what we think Management assumptions are the link When markets don't exist or barely trade Internal models are the tools we've made Discount rates and growth assumptions here The least reliable but sometimes all that's clear Disclosure matters more when Level Three's in play Help investors understand the judgment on display [Verse 3] Financial reporting needs this frame So every asset's not the same The hierarchy shows us reliability And gives investors visibility From traded stocks to complex derivatives Each level tells us what perspective gives The clearest picture of the value that we hold A story that needs to be told [Chorus] One Two Three, that's the hierarchy Level One is what we see Level Two has some inputs we can trace Level Three takes modeling's embrace One Two Three, transparency's the key Higher levels mean less certainty Fair value tells the story true When we know which level we're looking through [Outro] Observable to unobservable we go Three levels that investors need to know Fair value hierarchy shows the way For better reporting every day
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