Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 52

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 15
Chunk 52
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 expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt.  Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet.  Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close.  

F-13

Table of ContentsKBS REAL ESTATE INVESTMENT TRUST III, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)December 31, 20243.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value MeasurementsThe Company is required to measure certain financial instruments at fair value on a recurring basis.  In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis                       (e.g., carrying value of impaired real estate loans receivable and long-lived assets).  Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The fair value framework uses a three-tiered approach.  Fair value measurements are classified and disclosed in one of the following three categories:  •Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;  •Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and  •Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.  When available, the Company utilizes quoted market prices from independent third-party sources to determine fair value and classifies such items in Level 1 or Level 2.  In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement.  Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party.  When the Company determines the market for