The Company adopted ASC No. 820-10 (ASC
820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities.
ASC 820-10 defines fair value, establishes
a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands
disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require
or permit fair value measurements and are to be applied prospectively with limited exceptions.
ASC 820-10 defines fair value as the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value
of leased property. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from independent sources (observable inputs) and (2) an entitys own assumptions,
about market participant assumptions that are developed based on the best information available in the circumstances (unobservable
inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three
levels of the fair value hierarchy under ASC 820-10 are described below:
Level 1 applies to assets or liabilities
for which there are quoted prices in active markets for identical assets or liabilities.
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 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 Companys financial instruments
consist principally of cash, accounts payable, accrued liabilities, and amounts due to related parties. Pursuant to ASC 820, the
fair value of our cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for
identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair
values because of their nature and respective maturity dates or durations.