IREN Ltd Fair Value Disclosure
Fair value measured as of June 30, 2025 | |||||||||||||||||||||||
| (in USD thousands) | Total carrying value | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||||||||
Financial assets | |||||||||||||||||||||||
2030 Prepaid Forward Contract | $ | 83,117 | $ | - | $ | 83,117 | $ | - | |||||||||||||||
2029 Prepaid Forward Contract | 128,500 | - | 128,500 | - | |||||||||||||||||||
Total financial assets | $ | 211,617 | $ | - | $ | 211,617 | $ | - | |||||||||||||||
Derivative assets | |||||||||||||||||||||||
2030 Capped Call Transactions | $ | 46,400 | $ | - | $ | - | $ | 46,400 | |||||||||||||||
2029 Capped Call Transactions | 75,700 | - | - | 75,700 | |||||||||||||||||||
Bitcoin purchase option | 5,756 | - | 5,756 | - | |||||||||||||||||||
Total derivative assets | $ | 127,856 | $ | - | $ | 5,756 | $ | 122,100 | |||||||||||||||
Fair value measured as of June 30, 2024 | |||||||||||||||||||||||
| (in USD thousands) | Total carrying value | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||||||||
Electricity financial asset | $ | 6,530 | $ | - | $ | 6,530 | $ | - | |||||||||||||||
Fair value measured as of June 30, 2025 | |||||||||||||||||||||||
| (in USD thousands) | Total carrying value | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||||||||
| 2030 Notes | $ | 427,837 | $ | 483,089 | $ | - | $ | - | |||||||||||||||
| 2029 Notes | 534,928 | 712,844 | - | - | |||||||||||||||||||
| Total financial liabilities at amortized cost | $ | 962,765 | $ | 1,195,933 | $ | - | $ | - | |||||||||||||||
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.