Fair Value Disclosures

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Disclosures

12. Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include Level 1, Level 2 and Level 3.

Level 1 is defined as observable inputs such as quoted prices in active markets for identical assets;

Level 2 is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table represents the fair value of the financial instruments measured at fair value on a recurring basis:

	As of March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents*	$	83,884	$	—	$	—	$	83,884
Total assets measured at fair value	$	83,884	$	—	$	—	$	83,884
Liabilities
Acquisition-related liabilities	$	—	$	—	$	34,486	$	34,486
Total liabilities measured at fair value	$	—	$	—	$	34,486	$	34,486

	As of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents*	$	107,354	$	—	$	—	$	107,354
Total assets measured at fair value	$	107,354	$	—	$	—	$	107,354
Liabilities
Acquisition-related liabilities	$	—	$	—	$	32,675	$	32,675
Total liabilities measured at fair value	$	—	$	—	$	32,675	$	32,675

* Includes cash invested by the Company in certain money market accounts with a financial institution.

The following table reconciles the changes in the fair value of the liabilities categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2023:

	Acquisition related liabilities
Balance as of January 1, 2023	$	32,675
Additions, net of payments		159
Change in fair value		1,652
Balance as of March 31, 2023	$	34,486

In connection with certain business combinations, the Company may owe additional purchase consideration (contingent consideration included in the acquisition-related liabilities) based on the financial performance of the acquired entities after their acquisition. The fair value of the contingent consideration was determined using an unobservable input such as projected revenues, collections of accounts receivables, etc. Changes in any of the assumptions related to the unobservable inputs identified above may change the fair value of the contingent consideration.