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Fair value hierarchy is the valuation

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Company K received common shares in one of its customers, Company L, in exchange for the sale of certain products. The shares were restricted by the issuer (i.e., Company L) from resale for a period of 12 months and the stock certificate contained a note printed on the certificate stating that the shares are restricted. Company L is a publicly traded company. At the reporting date, its stock closed at $100/share. Given the volatility of the shares, company management believes that a discount of 16% should be applied to the traded price. After consulting with a valuation expert, you concur with management's judgment that the restriction equates to a 16% discount in all material respects. Under US GAAP, what is the fair value/share and what level on the fair value hierarchy is the valuation?

Reference no: EM133233696

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