Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company estimates and categorizes the fair value of its financial instruments by applying the following hierarchy:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to directly access.

Level 2 — Valuations based on quoted prices for similar assets or liabilities; valuations for interest-bearing securities based on non-daily quoted prices in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The following table presents the fair value of the Company’s financial instruments (in thousands):

	December 31, 2020								June 30, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	1,670	$	—	$	—	$	1,670	$	1,668	$	—	$	—	$	1,668
Total	$	1,670	$	—	$	—	$	1,670	$	1,668	$	—	$	—	$	1,668
Liabilities:
Post-closing payments related to acquisitions	$	—	$	31,529	$	—	$	31,529	$	—	$	9,045	$	—	$	9,045
Contingent consideration related to acquisitions		—		—		2,822		2,822		—		—		3,170		3,170
Total	$	—	$	31,529	$	2,822	$	34,351	$	—	$	9,045	$	3,170	$	12,215

Reported as:
Cash and cash equivalents							$	1,670							$	1,668
Other Liabilities:
Current							$	9,762							$	6,734
Noncurrent								24,589								5,481
Total							$	34,351							$	12,215

There were no transfers between Level 1, Level 2, and Level 3 during the periods presented.

The valuation technique used to measure the fair value of money market funds included using quoted prices in active markets for identical assets and are classified as Level 1 within the fair value hierarchy.

The post-closing payments are future payments related to the Company’s acquisition of Modernize completed in the first quarter of fiscal year 2021, and the acquisitions of AmOne Corp (“AmOne”), CloudControlMedia, LLC (“CCM”) and MyBankTracker.com, LLC (“MBT”) completed in fiscal year 2019. As the fair value of the Company’s post-closing payments was determined based on installments stipulated in the terms of the acquisition agreements and discount rates observable in the market, the post-closing payments are classified as Level 2 within the fair value hierarchy. See Note 8, Acquisitions, for further details related to the acquisitions.

The contingent consideration consists of estimated future payments related to the Company’s acquisition of CCM. The fair value of the contingent consideration is determined using the real options technique which incorporates various estimates, including projected net revenue that is subject to the contingent consideration payment, a volatility factor applied to net revenue based on year-on-year growth in net revenue of comparable companies and discount rates. As certain of these inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. Significant changes in the projected net revenue or discount rates would have a material impact on the fair value of the contingent consideration. Changes in the fair value of the contingent consideration are recorded in earnings on the Company’s condensed consolidated statements of operations. See Note 8, Acquisitions, for further details related to the acquisition.

The following table represents the changes in the contingent consideration during the three and six months ended December 31, 2020 (in thousands):