What it is
The fair value hierarchy ranks inputs by observability. Quoted prices for identical items are Level 1, other observable inputs are Level 2 and significant unobservable inputs are Level 3. This workbook lists every instrument measured at fair value, assigns it to a level and totals each level for assets and liabilities.
It ties each instrument to the general ledger, rolls the Level 3 balance forward with transfers pulled from a log, and holds the table of valuation techniques and unobservable inputs that supports the disclosure. Checks flag rows without a level, totals that do not agree and transfers that miss the roll-forward.
When to use it
- At each reporting date for entities with investments, derivatives, contingent consideration or other items at fair value.
- When preparing the fair value note and the Level 3 roll-forward.
- When an audit asks for the level assignment and valuation support by instrument.
What’s inside
- Instruments tab: 40 rows with level, technique, inputs, source and ledger tie
- Summary tab: assets, liabilities and net by level with share of total
- Level3 tab: roll-forward with transfers in and out and unrealized gains on held items
- Unobservable inputs table with range and weighted average
- Transfers tab: log with the date policy check
Standard cited
This template follows ASC 820. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
How is the level determined?
By the lowest-level input that is significant to the fair value measurement in its entirety. A measurement with one significant unobservable input is Level 3.
Where do net asset value investments go?
Investments measured at net asset value as a practical expedient are not assigned a level. The workbook carries them on their own row of the summary so the totals reconcile to the balance sheet.
What does the roll-forward need?
Opening balance, gains and losses in earnings and in other comprehensive income, purchases, sales, issuances, settlements and transfers into and out of Level 3, with the ending balance.
What policy applies to transfers between levels?
The entity discloses its policy for the date it recognizes transfers. Record whether the policy was applied for each transfer.
Related templates
- Disclosure Checklist: Fair Value Measurements (ASC 820)
- Cash Flow Hedge AOCI Roll-forward (ASC 815)
- Purchase Price Allocation Workbook (ASC 805)
- Lead Schedule Template (Excel)
Last updated 11/05/2026. All free templates.