Company: AAM-UN
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001213900-25-042038
Chunk: 7

Company: AA Mission Acquisition Corp.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part II, Item 8
Chunk 7
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 to common control or common significant influence.

Fair Value of Financial Instruments

The fair value of the Company’s
assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

The Company applies ASC 820,
which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines
fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s
principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy
established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs
when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability
and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s
own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing
the asset or liability and are to be developed based on the best information available in the circumstances.

●Level 1—Assets and liabilities with unadjusted,
quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in
active markets for identical assets or liabilities.

●Level 2—Inputs to the fair value measurement
are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable
inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

●Level 3—Inputs to the fair value measurement
are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets
or liabilities.

Income Taxes

The Company follows the asset
and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts
of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized