7 6 5 4 3 2 1 8 - Elevations Credit Union

Elevations Credit Union
Notes to Financial Statements
December 31, 2008 and 2007
developed based on the best information available in the circumstances. In that regard, SFAS 157 establishes a fair
value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical
assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
Level 1: Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access as of
the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or
liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by
observable market data.
Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that
market participants would use in pricing an asset or liability.
A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the
general classification of such instruments pursuant to the valuation hierarchy, is set forth below.
Investments Available –for- Sale: Where quoted prices are available in an active market, investments are classified
within level 1 of the valuation hierarchy. Level 1 investments would include highly liquid government bonds and
exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing
models, quoted prices of securities with similar characteristics, or discounted cash flow. Level 2 investments would
include U.S. agency securities, mortgage backed agency securities, obligations of states and political subdivisions
and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less
transparency around inputs to the valuation, investments are classified within level 3 of the valuation hierarchy.
The following table summarizes the investments available for sale that measured at fair value on a recurring basis as
of December 31, 2008, segregated by the level of the valuation inputs within the fair value hierarchy utilized to
measure fair value.
December 31, 2008
ELEVATIONS Credit Union 2008 annual report 42
Fair Value Measurements at December 31, 2008 Using
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs (Level 3)
Investments available- for- sale $ 143,108,865 $ 143,108,865
Other real estate owned 2,101,206 $ 2,101,206
The Credit Union may be required, from time to time, to measure certain assets and liabilities at fair value on a
nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are
measured at the lower of cost or market that were recognized at fair value below cost at the end of the period.
Impaired Loans: The Credit Union does not record loans at fair value on a recurring basis. However, from time to
time, a loan is considered impaired and an allowance for loan losses is established. The specific reserves for
collateral dependent impaired loans are based on the fair value of the collateral less estimated costs to sell. The fair
value of collateral was determined based on appraisals. In some cases, adjustments were made to the appraised
values due to various factors including age of the appraisal, age of comparables included in the appraisal, and known
changes in the market and in the collateral. When significant adjustments were based on unobservable inputs, the
resulting fair value measurement has been categorized as a Level 3 measurement.