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Financial Instruments and Fair Value Measurement
9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Financial Instruments and Fair Value Measurement

NOTE 3. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT

The Company’s financial instruments consist of cash equivalents, marketable securities, funds receivable, derivative instruments, accounts payable, accrued liabilities and merchants payable. Cash equivalents’ carrying value approximates fair value at the balance sheet dates, due to the short period of time to maturity. Marketable securities and derivative instruments are recognized at fair value. Funds receivable, accounts payable, accrued liabilities and merchants payable carrying values approximate fair value due to the short time to the expected receipt or payment date.

Assets and liabilities recognized at fair value on a recurring basis in the condensed consolidated balance sheets consisting of cash equivalents, marketable securities and derivative instruments are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows:

 

 

September 30, 2022

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in millions)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

42

 

 

$

42

 

 

$

 

 

$

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury bills

 

$

200

 

 

$

 

 

$

200

 

 

$

 

Commercial paper

 

 

6

 

 

 

 

 

 

6

 

 

 

 

Corporate bonds

 

 

37

 

 

 

 

 

 

37

 

 

 

 

Certificates of deposit

 

 

3

 

 

 

 

 

 

3

 

 

 

 

Non-U.S. government

 

 

4

 

 

 

 

 

 

4

 

 

 

 

Total marketable securities

 

$

250

 

 

$

 

 

$

250

 

 

$

 

Prepaid and other current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

3

 

 

$

 

 

$

3

 

 

$

 

Total financial assets

 

$

295

 

 

$

42

 

 

$

253

 

 

$

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accrued liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

8

 

 

$

 

 

$

8

 

 

$

 

Total financial liabilities

 

$

8

 

 

$

 

 

$

8

 

 

$

 

 

 

 

December 31, 2021

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in millions)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

13

 

 

$

13

 

 

$

 

 

$

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury bills

 

$

53

 

 

$

 

 

$

53

 

 

$

 

Commercial paper

 

 

39

 

 

 

 

 

 

39

 

 

 

 

Corporate bonds

 

 

57

 

 

 

 

 

 

57

 

 

 

 

Certificates of deposit

 

 

5

 

 

 

 

 

 

5

 

 

 

 

Non-U.S. government

 

 

13

 

 

 

 

 

 

13

 

 

 

 

Total marketable securities

 

$

167

 

 

$

 

 

$

167

 

 

$

 

Prepaid and other current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

4

 

 

$

 

 

$

4

 

 

$

 

Total financial assets

 

$

184

 

 

$

13

 

 

$

171

 

 

$

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accrued liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

1

 

 

$

 

 

$

1

 

 

$

 

Total financial liabilities

 

$

1

 

 

$

 

 

$

1

 

 

$

 

 

The Company classifies cash equivalents and marketable securities within Level 1 or Level 2 because the Company uses quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. The derivative asset and liability related to the Company’s foreign currency derivative contracts are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, including currency spot and forward rates.

The following table summarizes the contractual maturities of the Company’s marketable securities:

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

Amortized
Cost

 

 

Estimated
Fair Value

 

 

Amortized
Cost

 

 

Estimated
Fair Value

 

 

 

(in millions)

 

Due within one year

 

$

251

 

 

$

250

 

 

$

150

 

 

$

150

 

Due after one year through five years

 

 

 

 

 

 

 

 

17

 

 

 

17

 

Total marketable securities

 

$

251

 

 

$

250

 

 

$

167

 

 

$

167

 

All of the Company’s available-for-sale marketable securities are subject to a periodic evaluation for a credit loss allowance and impairment review. The Company did not identify any of its available-for-sale marketable securities requiring an allowance for credit loss or as other-than-temporarily impaired in any of the periods presented. Additionally, the unrealized net loss and net gain on available-for-sale marketable securities as of September 30, 2022 and December 31, 2021, respectively, were insignificant.