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Fair Value of Financial Instruments
6 Months Ended
Jun. 30, 2022
Fair Value of Financial Instruments  
Fair Value of Financial Instruments

5.   Fair Value of Financial Instruments

For financial assets and liabilities that are measured at fair value on a recurring basis at each reporting period, the Company uses a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The Company invests primarily in money market funds, which are measured and recorded at fair value on a recurring basis and are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The fair value of these financial instruments were as follows:

June 30, 2022

    

Level 1

    

Level 2

    

Level 3

    

Total

(in thousands)

Cash and cash equivalents:

Money market funds

$

166,279

$

$

$

166,279

December 31, 2021

    

Level 1

    

Level 2

    

Level 3

    

Total

(in thousands)

Cash and cash equivalents:

Money market funds

$

181,009

$

$

$

181,009

The carrying amounts of the Company’s accounts receivable, accounts payable and other current liabilities approximate their fair values due to their short maturities. The carrying value of the Company’s long-term debt approximates its fair value based on Level 2 inputs as the principal amounts outstanding are subject to variable interest rates that are based on market rates (see Note 10).