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Fair Value Measurements
3 Months Ended
Mar. 31, 2024
Fair Value Measurements  
Fair Value Measurements

Note 4. Fair Value Measurements

Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes quoted market prices, broker or dealer quotations, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

The following tables present the fair value of the Company’s financial assets determined using the inputs defined above (in thousands):

March 31, 2024

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets:

Money market funds

$

24,432

$

$

 

$

24,432

Certificates of deposit

 

10,661

 

 

 

10,661

Commercial paper

 

170,510

 

 

 

170,510

Corporate debt securities

12,657

12,657

U.S. Treasury and agency securities

101,035

101,035

Total financial assets

$

24,432

$

294,863

  

$

 

$

319,295

December 31, 2023

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets:

Money market funds

$

19,212

$

$

 

$

19,212

Certificates of deposit

 

13,004

 

 

 

13,004

Commercial paper

 

 

130,296

 

 

 

130,296

Corporate debt securities

 

 

7,672

  

 

 

 

7,672

U.S. Treasury and agency securities

145,085

 

 

145,085

Total financial assets

$

19,212

$

296,057

  

$

 

$

315,269

The Company’s certificates of deposit, commercial paper, corporate debt securities, and U.S. Treasury and agency securities, including U.S. Treasury bills, are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

The carrying amount of the Company’s remaining financial assets and liabilities, including cash, receivables and payables, approximates their fair value due to their short-term nature.