Noble Corp plc Fair Value Disclosure
| December 31, 2022 | ||||||||||||||||||||||||||
| Estimated Fair Value Measurements | ||||||||||||||||||||||||||
| Carrying Amount | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||
Assets - | ||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | 2,422 | $ | — | $ | 2,422 | $ | — | ||||||||||||||||||
Liabilities - | ||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | 1,124 | $ | — | $ | 1,124 | $ | — | ||||||||||||||||||
| December 31, 2021 | ||||||||||||||||||||||||||
| Estimated Fair Value Measurements | ||||||||||||||||||||||||||
| Carrying Amount | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||
Assets - | ||||||||||||||||||||||||||
| Marketable securities | $ | 7,645 | $ | 7,645 | $ | — | $ | — | ||||||||||||||||||
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.