enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect  on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment  date. Fair Value Measurement – NNN’s estimates of fair value of financial and non-financial assets and liabilities are based on the  framework established in the fair value accounting guidance. The framework specifies a hierarchy of valuation inputs which  was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The  guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which  are considered observable and one that is considered unobservable. The following describes the three levels: Other Comprehensive Income (Loss) – The following table outlines the changes in accumulated other comprehensive income  (dollars in thousands): 1) Additional disclosure is included in Note 16 – Derivatives. 2) Additional disclosure is included in Note 5 – Commercial Mortgage Residual Interests. 3) Reclassifications out of other comprehensive income are recorded in Interest Expense on the Consolidated Statements of Comprehensive  Income. There is no income tax expense (benefit) resulting from this reclassification. New Accounting Pronouncements – In December 2011, the FASB issued Accounting Standards Update ("ASU") 2011-10,  which clarifies the scope of current U.S. generally accepted accounting principles ("GAAP"). The amendments will resolve the  diversity in practice about whether the guidance in subtopic 360-20 applies to the derecognition of in substance real estate  when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default  by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods  within those years, beginning on or after June 15, 2012. The adoption of the standard did not have a significant impact on  NNN's financial position or results of operations. In December 2011, the FASB issued ASU 2011-11 amending its guidance on offsetting assets and liabilities in financial  statements. The objective of this update would be to require disclosure to facilitate comparison between those entities that  prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of   54 Gain or Loss on  Cash Flow  Hedges  (1) Unrealized  Gains and  Losses on  Commercial  Mortgage  Residual  Interests  (2) Unrealized Gains and Losses on Available-for- Sale Securities Total Beginning balance, December 31, 2011 $ (5,924) $ 2,112 $ (18) $ (3,830) Other comprehensive income (loss) — 1,132 85 1,217 Reclassifications from accumulated other comprehensive income to net earnings 231 — — 231 (3) Net current period other comprehensive income (loss) 231 1,132 85 1,448 Ending balance, December 31, 2012 (5,693) 3,244 67 (2,382) Other comprehensive income (loss) (3,141) 511 69 (2,561) Reclassifications from accumulated other comprehensive income to net earnings 438 — — 438 (3) Net current period other comprehensive income (loss) (2,703) 511 69 (2,123) Ending balance, December 31, 2013 $ (8,396) $ 3,755 $ 136 $ (4,505) •  Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities. •  Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such  as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are  observable or can be corroborated by observable market data for substantially the full term of the assets or  liabilities. •  Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not  observable in the market. These unobservable assumptions reflect estimates of assumptions that market  participants would use in pricing the asset or liability. Valuation techniques include option pricing models,  discounted cash flow models and similar techniques.