Another note to the statements indicates that the foundation has made grants to various other organi-zations. Some of these are payable over a five-year period. Accordingly it adjusted its grants payable account to take into account the time value of money and applied a discount rate of 3 percent. However per the note, the grants are classified as Level 3 in accordance with the fair value hierarchy and have been valued using an income approach. What are the different valuation techniques? What is level 3 classification? Explain this in simple words.

P. 12-7 Pledges to be fulfilled in the future raise special issues of accounting. The footnote in the financial statements of The Welfare Foundation contain the following note titled "Promises to Give": Unconditional promises to give were as follows at December 31: 2020 2019 Contributions due in less than one year $2,293,775 $2,305,753 Contributions due in one to five years 5.454,320 6,272.198 Contributions due in more than five years 1.098,384 1,696,768 8.846.479 10,274,719 Less allowance for bad debts (166.972) (398,723) Less discount to net present value (497.812) (710,124) $8,181.695 $9,165,872 The discount rates used on long-term promises to give were 3 percent in 2020 and 2019