FINANCIAL RESULTS
Albanese Cormier Holdings, LLC and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2025 and 2024
1.
Summary of Significant Accounting Policies, continued Interest Rate Swap Derivative
The Company uses interest rate swap contracts as cash flow hedges to eliminate the cash flow exposure of interest rate movements on variable rate debt. The Company adopted Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 815, Accounting for Derivative Instruments and Hedging Activities, to account for its interest rate swap contracts. The interest rate swap derivative is recognized in the balance sheet at its fair value. At December 31, 2025 and 2024, the derivative balance was $798,396 and $3,890,259 respectively. For the years ended December 31, 2025 and 2024, the Company classified its interest rate swap derivative within Level 2 of the valuation hierarchy, as defined below: Level 1 – Valuations using unadjusted quoted prices for assets and liabilities traded in active markets, such as stocks listed on the New York Stock Exchange. Active markets are defined as having the following characteristics for the measured asset or liability: (i) many transactions, (ii) current prices, (iii) price quotes not varying substantially among market makers, (iv) narrow bid/ask spreads and (v) most information regarding the issuer is publicly available. The Company currently has no assets or liabilities value suing Level 1 inputs Level 2 – Valuations for assets and liabilities traded in less active, dealer or broker markets. Fair values are primarily obtained from third party pricing services for identical or comparable assets or liabilities. Level 2 inputs for fair value measurements are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: a. Quoted prices for similar assets or liabilities in active markets; b. Quoted prices for identical or similar assets or liabilities that are not active (that is markets in which there are few transactions for the asset or liability, the prices are not current, price quotations vary substantially either over time or among market markers (for example, some brokered markets), or in which little information is released publicly); c. Inputs other than quoted prices that are observable within the market for the asset or liability (for example, interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates that are observable at commonly quoted intervals); and d. Inputs that are derived or corroborated by observable market data by correlation or by other means (for example, market-corroborated inputs). The Level 2 inputs utilized by the Company includes valuations provided by Wells Fargo Bank, Hancock Whitney Bank and Truist Bank, the third party intermediaries with which it contracted to enter the hedges.
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81 AlbaneseCormier® | 2025 Annual Report
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