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Fair Value Disclosures
9 Months Ended
Sep. 30, 2024
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 September 30, 2024

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents*

 

$

405,202

 

 

$

 

 

$

 

 

$

405,202

 

Total assets measured at fair value

 

$

405,202

 

 

$

 

 

$

 

 

$

405,202

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related liabilities

 

$

 

 

$

 

 

$

12,983

 

 

$

12,983

 

Total liabilities measured at fair value

 

$

 

 

$

 

 

$

12,983

 

 

$

12,983

 

 

 

As of December 31, 2023

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents*

 

$

113,271

 

 

$

 

 

$

 

 

$

113,271

 

Total assets measured at fair value

 

$

113,271

 

 

$

 

 

$

 

 

$

113,271

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related liabilities

 

$

 

 

$

 

 

$

20,294

 

 

$

20,294

 

Total liabilities measured at fair value

 

$

 

 

$

 

 

$

20,294

 

 

$

20,294

 

 

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

The following table reconciles the changes in the fair value of the liabilities categorized within Level 3 of the fair value hierarchy for the nine months ended September 30, 2024:

 

Acquisition
related liabilities

 

Balance as of January 1, 2024

 

$

20,294

 

Payments

 

 

(8,699

)

Change in fair value

 

 

1,388

 

Balance as of September 30, 2024

 

$

12,983

 

 

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.