Strategy Inc Fair Value Disclosure
(4) Fair Value Measurements
As of December 31, 2017 and 2016, there were no financial assets or liabilities measured at fair value on a recurring basis. All of the Company’s foreign currency forward contracts (designated as Level 2, non-hedging derivative instruments) were settled by December 31, 2015. Changes in the fair value of the Company’s foreign currency forward contracts during the year ended December 31, 2015 resulted in a net gain of $0.5 million recorded to “Other income, net.”
There were no transfers among the levels within the fair value hierarchy during the years ended December 31, 2017, 2016, and 2015. As of December 31, 2017 and 2016, the Company had no assets or liabilities that were required to be measured at fair value on a non-recurring basis.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2017 | Feb 7, 2018 | Showing above |
| 2016 | Feb 10, 2017 | |
| 2015 | Feb 26, 2016 | |
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.