Freddie Mac 2014 Annual Report Download - page 223

218 Freddie Mac
Observable market data includes, but is not limited to, quoted prices and market transactions. Changes in economic conditions
or the volume and level of activity in a market generally will drive changes in availability of observable market data. Changes
in availability of observable market data, which also may result in changing the valuation technique used, are generally the
cause of transfers between Level 1, 2, or 3.
For the year ended December 31, 2014, our transfers between Level 1 and Level 2 assets and liabilities were less than $1
million. For the year ended December 31, 2013, our transfers between Level 1 and Level 2 were $27 million for assets and $5
million for liabilities.
The table below presents a reconciliation of all assets and liabilities measured on our consolidated balance sheets at fair
value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013,
including transfers into and out of Level 3 assets and liabilities. The table also presents gains and losses due to changes in fair
value, including both realized and unrealized gains and losses, recognized in our consolidated statements of comprehensive
income for Level 3 assets and liabilities for the years ended December 31, 2014 and 2013. When assets and liabilities are
transferred between levels, we recognize the transfer as of the beginning of the period.
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