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PPCs A&A Workpapers

Fair value measurements

This workbook is designed to obtain and document the considerations involved in preparing the fair value measurements disclosures required by FASB ASC 820, Fair Value Measurements and Disclosures. Those requirements and further details on measuring fair value are discussed in Chapter 3 of PPC’s Audits of Employee Benefit Plans. This worksheet is not required to be completed. However, if it is used, the auditor may ask plan personnel to complete the workbook or work with their investment advisor, custodian, or trustee, if applicable, to have it prepared. The Summary worksheet is applicable to plans with investments, and the Level 3 Reconciliation worksheet is applicable only to those plans that have assets valued with Level 3 unobservable inputs.

Entering Data

The Summary worksheet allows for (1) a brief description of the individual investment or investment class, (2) the valuation methodologies/techniques used to measure the investment/investment class, (3) the types of inputs used for fair value measurement, and (4) other valuation considerations. (The comment boxes in the cells denoted with a small red triangle in the upper right of the column headings provide descriptions and examples of valuation methodologies, techniques, inputs, input levels, and other valuation considerations.)
The summary worksheet provides thirty input rows. If the user does not want to view or print unused input rows, click the Hide Empty Rows button at the top of the worksheet. Conversely, clicking the Show Empty Rows button will unhide any unused rows.
The Level 3 Reconciliation worksheet will show only the investments/investment classes from the Summary worksheet that were designated as requiring level 3 inputs. The information requested in this worksheet is necessary to satisfy some of the disclosure requirement of FASB ASC 820. Specifically, the worksheet provides a rollforward reconciliation of fair value measurements, estimated by using Level 3 inputs. With the exception of realized losses, unrealized losses, sales transactions, and transfers out of the level 3 classification, all amounts should be entered as positive values.