Fair value is determined using one of three approaches:
1. Market Approach: This method uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. 2. Income Approach: This method converts future amounts (like cash flows or earnings) to a single current (discounted) amount. The fair value measurement reflects current market expectations about those future amounts. 3. Cost Approach: This method reflects the amount that would be required currently to replace the service capacity of an asset (often referred to as current replacement cost).