How does Aira Fitness define Level 2 inputs within the fair value hierarchy for assets or liabilities?

According to Aira Fitness's 2025 Franchise Disclosure Document, Level 2 inputs are defined within the context of fair value measurement for financial instruments. The document explains that the Financial Accounting Standards Board (FASB) provides guidance on a hierarchy of valuation techniques. This hierarchy is based on whether the inputs to those techniques are observable or unobservable, with observable inputs reflecting market data from independent sources and unobservable inputs reflecting market assumptions.

Within this hierarchy, Level 2 inputs are those other than quoted prices included within Level 1. These Level 2 inputs are observable for the asset or liability, either directly or indirectly. Examples of Level 2 inputs include quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active.

In simpler terms, Level 2 inputs use market-based information that is not exactly the price of the specific asset or liability being valued but is related and can be observed. This is in contrast to Level 1, which uses the direct quoted prices of identical items in active markets, and Level 3, which relies on unobservable inputs and the company's own assumptions.