Level 2 inputs are inputs used in fair value measurements that are derived from observable market data for similar assets or liabilities, rather than being directly quoted from active markets. These inputs can include prices from similar transactions or market quotes, which help in estimating the fair value of an asset or liability when market prices are not readily available. This level of input provides a more reliable basis for valuation compared to unobservable inputs, thus enhancing the accuracy of financial reporting.
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