Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 140

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 8
Chunk 140
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 gain or loss is recognized.

Fair
Value Measurements

The
carrying values of financial instruments comprising cash and cash equivalents, payables, and notes payable-related party approximate
fair values due to the short-term maturities of these instruments. The notes payable- related party is considered a level 3 measurement.
As defined in ASC 820, Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company
utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about
risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or
generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and
the lowest priority to unobservable inputs (Level 3 measurement). This fair value measurement framework applies to both initial and subsequent
measurement.

    Level 1:
    Quoted prices are available
    in active markets for identical assets or liabilities as of the reporting date.

    Level 2:
    Pricing inputs are other
    than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date.
    Level 2 includes those financial instruments that are valued using models or other valuation methodologies.

    Level 3:
    Pricing inputs include
    significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed
    methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair
    value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies
    and similar techniques.

There
are no assets or liabilities measured at fair value on a recurring basis. Assets and liabilities accounted for at fair value on a non-recurring
basis in accordance with the fair value hierarchy include the initial allocation of the asset acquisition purchase price, including asset
retirement obligations, the fair value of oil and natural gas properties and the assessment of impairment.

35

The
fair value measurements and allocation of assets acquired are measured on a nonrecurring basis on the acquisition date using an income
valuation technique based on inputs that