For Bb.Q Chicken, what characterizes Level 3 inputs in the fair value hierarchy?

According to Bb.Q Chicken's 2025 Franchise Disclosure Document, Level 3 inputs in the fair value hierarchy are characterized as unobservable inputs that reflect management's assumptions. The company uses a fair value method to value its assets and liabilities. This method is described in ASC 820, Fair Value Measurements and Disclosures.

ASC 820 establishes a hierarchy that prioritizes the inputs used to measure fair value, giving the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Level 1 inputs are observable, such as quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

For certain financial instruments, including cash and cash equivalents, accounts receivables, and accounts payable, Bb.Q Chicken notes that the fair values approximate carrying values due to their short-term maturities. The company maintains policies and procedures to value instruments using the best and most relevant data available and performs procedures to assess the reasonableness of Level 3 valuations, including instruments valued by third parties.