Fair Value of Financial Instruments and Non-Financial Instruments |
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| Fair Value of Financial Instruments and Non-Financial Instruments | 5. Fair Value of Financial Instruments and Non-Financial Instruments Financial Instruments Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value determination in accordance with applicable accounting guidance requires that a number of significant judgments be made. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or as required for disclosure purposes by applicable accounting guidance on disclosures about fair value of financial instruments. Depending on the nature of the assets and liabilities, various valuation techniques and assumptions are used when estimating fair value. The carrying amounts of certain of the Company’s financial instruments, including prepaid expense and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments. The Company follows the provisions of ASC Topic 820, Fair Value Measurement, for financial assets and liabilities measured on a recurring basis. The guidance requires fair value measurements be classified and disclosed in one of the following three categories:
The following fair value hierarchy table presents information about the Company’s assets measured at fair value on a recurring basis. Included within cash and cash equivalents on the balance sheet, but excluded from the fair value hierarchy table, are cash deposits held at financial institutions:
All of the marketable securities had contractual maturities less than one year as of December 31, 2024 and unrealized gains and losses on the marketable securities were de minimis as of December 31, 2024. Non-Financial Instruments Long-lived non-financial assets are measured at fair value on a nonrecurring basis for purposes of calculating impairment using Level 3 inputs as defined in the fair value hierarchy. The fair value of long-lived assets using Level 3 inputs is determined by estimating the amount and timing of net future cash flows (which are unobservable inputs) and discounting them using a risk-adjusted rate of interest. Significant increases or decreases in actual cash flows may result in valuation changes. Assets remeasured in the six months ended June 30, 2025 include the laboratory equipment and certain other assets which were sold prior to June 30, 2025 and are not included in the balance sheet as of June 30, 2025. The impairment related to the remeasurement of $2.6 million is included in the statement of operations for the six months ended June 30, 2025. There were no assets remeasured in the three months ended June 30, 2025. |
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