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NOTE C – FAIR VALUE OF FINANCIAL INSTRUMENTS Effective January 1, 2008, the Foundation adopted FASB ASC 820, Fair Value Measurements and Disclosures. FASB ASC 820, which establishes a single definition of fair value and framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurements, and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value. Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable. The valuation techniques required by FASB ASC 820 are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Foundation’s market assumptions. These two types of inputs create the following fair value hierarchy. Level 1

Quoted prices for identical instruments in an active market.

Level 2

Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs are observable in active markets.

Level 3

Valuations derived from valuation techniques in which one or more significant inputs are not observable, or supported by little or no market activity.

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at June 30, 2016 and 2015. Mutual Funds: Valued at the closing price reported on the active market on which the individual funds are traded. Money Market: Valued at cost plus interest earned, which approximates fair value. The preceding approach described might produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Foundation believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

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CVLS 2016 Annual Report  

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