Not observable definition
Not observable in this context means that there is little or no current market data available from which to determine the level at which an arm’s length transaction would likely occur, but it generally does not mean that there is absolutely no market data available upon which to base a determination of fair value (historical data may, for example, be used). Furthermore, the assessment of hierarchy level is based on the lowest level of input that is significant to the fair value of the financial instrument. Consequently, the level of uncertainty in the determination of the unobservable inputs will generally give rise to valuation uncertainty that is less than the fair value itself.
Not observable in this context means that there is little or no current market data available to determine what the price of a transaction would be. Generally, this does not mean that there is no market data available on which to base the determination of fair value (for example, price data can be used).