Company: KBSR
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001482430-25-000054
Chunk: 145

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 145
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)$(8,120)$(19,687)Unrealized loss on interest rate swaps2,177 21,229 8,435 13,728 Gains related to swap terminations— — — (178)Net (gain) loss on derivative instruments$(551)$14,918 $315 $(6,137)

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Table of ContentsPART I. FINANCIAL INFORMATION (CONTINUED)Item 1.  Financial Statements (continued)KBS REAL ESTATE INVESTMENT TRUST III, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)September 30, 2025(unaudited)10.      FAIR VALUE DISCLOSURES

Under GAAP, the 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 GAAP 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.  The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment.  The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments.  Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades.  The Company evaluates several factors when determining if a market is inactive or