Fair Value Measurements |
4. Fair Value Measurements The Company applies the fair value method under ASC Topic 820, Fair Value Measurements and Disclosures . The ASC Topic 820 hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following categories based on the lowest level input used that is significant to a particular fair value measurement:
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Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. |
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Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data. |
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Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by a reporting entity—e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security. | The Company has no assets or liabilities that were measured using prices with significant unobservable inputs (Level 3 assets and liabilities) as of September 30, 2022 or December 31, 2021. The carrying value of cash held in money market funds of approximately $47.1 million as of September 30, 2022 and $56.5 million as of December 31, 2021 is included in cash and cash equivalents on the condensed consolidated balance sheets and approximates market value based on quoted market prices or Level 1 inputs. The carrying value of cash held in commercial paper of approximately $36.0 million and $0 as of September 30, 2022 and December 31, 2021, respectively, is included in cash and cash equivalents. The fair value measurements of the Company’s cash equivalents and investment securities are identified in the following tables (in thousands):
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Fair Value Measurements at Reporting Date Using |
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Quoted Prices in Active Markets for Identical Assets (Level 1) |
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Significant Other Observable Inputs (Level 2) |
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Significant Unobservable Inputs (Level 3) |
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$ |
47,122 |
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$ |
47,122 |
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$ |
— |
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$ |
— |
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U.S. Government Agency Securities |
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181,209 |
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— |
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181,209 |
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— |
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FDIC Certificates of Deposit |
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3,104 |
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— |
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3,104 |
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— |
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7,500 |
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— |
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7,500 |
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— |
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124,671 |
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— |
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124,671 |
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— |
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212,871 |
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— |
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212,871 |
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— |
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Fair Value Measurements at |
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Quoted Prices in Active Markets for Identical Assets (Level 1) |
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Significant Other Observable Inputs (Level 2) |
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Significant Unobservable Inputs (Level 3) |
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Money Market Funds |
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$ |
56,539 |
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$ |
56,539 |
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$ |
— |
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$ |
— |
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U.S. Government Agency Securities |
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71,652 |
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— |
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71,652 |
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— |
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Certificates of Deposit |
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26,233 |
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— |
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26,233 |
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Commercial Paper |
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55,919 |
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— |
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55,919 |
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— |
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Corporate Notes/Bonds |
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166,164 |
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— |
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166,164 |
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— |
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