Level 1, 2, 3: for sale on the market ?
For securities, this brings us to the three categories of investments; Levels 1, 2 and 3. Here's a guide:
Current Name; Level 1
Prior Name; Trading Securities
English Translation; We're selling now
Valuation (exit); Market value, probably on an exchange
Current Name; Level 2
Prior Name; Available for Sale
English Translation; We're selling if the price is right
Valuation; Market value, preferably on an exchange
Current Name; Level 3
Prior Name; Held to Maturity
English Translation; We're not selling
Valuation; Cost, unless the loss is "other than temporary".
Do you see a trend in valuations? It's ALL exit value. It's all based on intent. The reason we don't time value discount Level 1 and 2 securities is because the cash conversion is projected to happen now (or soon enough).
[ Via Calculated Risk ]