How LiveData sets the value for Internals of Android Architecture Components Part II- LiveData

MutableLiveDataSetValue.java

protected void setValue(T value) {
    assertMainThread("setValue");
    mVersion++;
    mData = value;
    dispatchingValue(null);
}

private void dispatchingValue(@Nullable ObserverWrapper initiator) {
    if (mDispatchingValue) {
        mDispatchInvalidated = true;
        return;
    }
    mDispatchingValue = true;
    do {
        mDispatchInvalidated = false;
        if (initiator != null) {
            considerNotify(initiator);
            initiator = null;
        } else {
            for (Iterator<Map.Entry<Observer<T>, ObserverWrapper>> iterator =
                    mObservers.iteratorWithAdditions(); iterator.hasNext(); ) {
                considerNotify(iterator.next().getValue());
                if (mDispatchInvalidated) {
                    break;
                }
            }
        }
    } while (mDispatchInvalidated);
    mDispatchingValue = false;
}

private void considerNotify(ObserverWrapper observer) {
    if (!observer.mActive) {
        return;
    }
    // Check latest state b4 dispatch. Maybe it changed state but we didn't get the event yet.
    //
    // we still first check observer.active to keep it as the entrance for events. So even if
    // the observer moved to an active state, if we've not received that event, we better not
    // notify for a more predictable notification order.
    if (!observer.shouldBeActive()) {
        observer.activeStateChanged(false);
        return;
    }
    if (observer.mLastVersion >= mVersion) {
        return;
    }
    observer.mLastVersion = mVersion;
    //noinspection unchecked
    observer.mObserver.onChanged((T) mData);
}