Observable inputs are inputs used in the valuation of an asset or liability that are derived from market data, which can be readily obtained from external sources. These inputs are essential for determining fair value, particularly in financial reporting, as they reflect current market conditions and enhance the reliability of the valuation. Observable inputs can include quoted prices for identical or similar assets and liabilities, and they play a crucial role in ensuring transparency and consistency in financial measurements.
congrats on reading the definition of observable inputs. now let's actually learn it.