| 5. |
Fair Value of Financial Instruments
|
| |
|
| |
ASC 825,
Financial Instruments
, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value:
|
| |
|
| |
Level 1
|
| |
|
| |
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
|
| |
|
| |
Level 2
|
| |
|
| |
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
|
| |
|
| |
Level 3
|
| |
|
| |
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
|
| |
|
| |
The financial instruments consist principally of cash, accounts payable, and due to related parties. The fair value of cash when applicable is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.
|
| |
|
| |
Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of April 30, 2016 and July 31, 2015, as follows:
|
| |
|
|
Fair Value Measurements Using |
|
|
|
|
|
|
|
| |
|
|
Quoted Prices in |
|
|
Significant |
|
|
|
|
|
|
|
|
|
|
| |
|
|
Active Markets |
|
|
Other |
|
|
Significant |
|
|
|
|
|
|
|
| |
|
|
For Identical |
|
|
Observable |
|
|
Unobservable |
|
|
Balance as of |
|
|
Balance as of |
|
| |
|
|
Instruments |
|
|
Inputs |
|
|
Inputs |
|
|
April 30, |
|
|
July 31, |
|
| |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
2016 |
|
|
2015 |
|
| |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Cash |
|
258
|
|
|
–
|
|
|
–
|
|
|
258
|
|
|
5,586
|
|
The Company does not have any liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet as of April 30, 2016 and July 31, 2015.
Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.
|