Company: KG
Filing Date: 2025-03-24
Form Type: S-4/A
Source: 0001104659-25-027242
Chunk: 234

Company: Kestrel Group Ltd
Filing Date: 2025-03-24
Form: S-4/A
Chunk 234
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 any periods presented, no earnings were allocated to the B Units in the computation of earnings per unit.

#### Fair Value
Kestrel measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction

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TABLE OF CONTENTS

between market participants at the measurement date. Kestrel utilizes a three-level hierarchy for fair value measurements based on the observability of inputs to the valuation of an asset or liability as of the measurement date.

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Level 1: Quoted prices in active markets for identical assets or liabilities.

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Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3: Unobservable inputs for the asset or liability, reflecting Kestrel management’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Kestrel maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value of financial instruments is determined using various valuation techniques, including the market approach, income approach, and cost approach, as appropriate. Changes in fair value measurements are recorded in the period in which they occur.

#### Advertising
Advertising costs are recorded in the consolidated statement of operations in the period in which they are incurred.

#### Interest Income
Interest income is recorded in the consolidated statements of operations in other income in the period in which it is earned and represents interest earned on Kestrel’s money market accounts.

#### Equity-Based Compensation
Kestrel estimates the fair value of equity-based awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the five-year vesting period using the straight-line attribution method. These amounts are reduced by an estimated forfeiture rate. The forfeiture rate is estimated based on actual cancellation experience and is applied to all equity-based awards. The rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Recently Adopted Accounting Standards Updates (ASU)

ASU 2023-07: In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The updated accounting guidance requires expanded reportable segment disclosures,