Fair Value Measurement

9 Months Ended

Sep. 30, 2023

16. Fair Value Measurement

The following tables presents information about the Company's assets and liabilities that are measure at fair value on a recurring basis at September 30, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.


	September 30, 2023
	Level 1	Level 2	Level 3	Total
Financial liabilities:	$’000	$’000	$’000	$’000
Derivative liability	—	349	—	349
	—	349	—	349


	December 31, 2022
	Level 1	Level 2	Level 3	Total
Financial liabilities:	$’000	$’000	$’000	$’000
Accrued compensation liability	3,602	—	—	3,602
	3,602	—	—	3,602

There were no transfers between fair value levels during the three and nine months ended September 30, 2023.

See Note 18 – Equity for details related to accrued compensation liability being fair valued using Level 1 inputs.

See Note 14 – Commitments and contingencies and Note 17 – Financial instruments for details related to the Derivative liability being fair valued using Level 2 inputs.

Derivative Liability

The Derivative liability relates to the forward sale contract executed in September 2023. Refer to Note 14 – Commitments and contingencies, for a more detailed discussion of the transaction. The fair value of the derivative liability is based on quoted prices for similar assets and liabilities in active market or inputs that are observable which represent Level 2 measurements within the fair value hierarchy. The estimated fair value of the derivative liability is based on observable prices for similar assets sourced by an independent marketplace. During the three and nine months ended September 30, 2023, the fair value increased by $0.4 million.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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