Level 3 Asset

Level 3 Asset - Level 3 Asset as determined by FASB 157 is an asset for which an accurate fair market value is not calculated. An outlay model may be able to provide an approximation, but are generally illiquid. A mortgage-backed protection might be a Level 3 asset. Financial assets and liabilities whose values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability. Examples include certain private equity investments, residential and commercial.