Fair Value Measurements

12 Months Ended

Dec. 31, 2021

ASC Topic 820, “Fair Value Measurements and Disclosures” ("ASC 820") defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability as against assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk.

Assets and Liabilities Measured at Fair Value

The following table sets forth the Company’s assets and liabilities that were accounted for at fair value as of December 31, 2021 and 2020.


	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
As of December 31, 2021	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash and cash equivalents (money market funds)*	$	5,374	$	—	$	—	$	5,374
Mutual funds**	$	127,551	$	—	$	—	$	127,551
Derivative financial instruments	$	—	$	14,989	$	—	$	14,989
Total	$	132,925	$	14,989	$	—	$	147,914
Liabilities
Derivative financial instruments	$	—	$	3,637	$	—	$	3,637
Contingent consideration	$	—	$	—	$	9,000	$	9,000
Total	$	—	$	3,637	$	9,000	$	12,637

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
As of December 31, 2020	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash and cash equivalents (money market funds)*	$	13,463	$	—	$	—	$	13,463
Mutual funds**	$	160,441	$	—	$	—	$	160,441
Derivative financial instruments	$	—	$	16,688	$	—	$	16,688
Total	$	173,904	$	16,688	$	—	$	190,592
Liabilities
Derivative financial instruments	$	—	$	464	$	—	$	464
Total	$	—	$	464	$	—	$	464

* Represents money market funds which are carried at the fair value option under ASC 825 "Financial Instruments".

** Represents those short-term investments which are carried at the fair value option under ASC 825 "Financial Instruments".

Derivative Financial Instruments: The Company’s derivative financial instruments consist of foreign currency forward exchange contracts. Fair values for derivative financial instruments are based on independent sources including highly rated financial institutions and are classified as Level 2. Refer to Note 16 - Derivatives and Hedge Accounting to the consolidated financial statements for further details.

Fair value of Contingent Consideration: The fair value measurement of contingent consideration is determined using Level 3 inputs. The Company’s contingent consideration represents a component of the total purchase consideration for its acquisition of Clairvoyant. The measurement is calculated using unobservable inputs based on the Company’s own assessment of achievement of certain performance goals by Clairvoyant during 2022 and 2023 calendar years. The Company estimated the fair value of the contingent consideration to be $9,000, based on Monte Carlo simulation model and scenario-based method.

Financial instruments not carried at fair value:

The Company’s other financial instruments not carried at fair value consist primarily of cash and cash equivalents (except investments in money market funds, as disclosed above), short-term investments (except investments in mutual funds, as disclosed above), restricted cash, accrued interest on term deposits, accrued capital expenditures, accrued expenses and interest payable on borrowings for which fair values approximate their carrying amounts due to their short-term nature. The carrying value of the Company’s outstanding revolving credit facility approximates its fair value because the Company’s interest rate yield is near current market rates for comparable debt instruments.

Convertible Senior Notes:

The Company settled the Notes during the year ended December 31, 2021. Refer to Note 17 - Borrowings to the consolidated financial statements for further details.

The total estimated fair value of the Notes as of December 31, 2020 was $152,384. The fair value was determined based on market yields for similar convertible notes as of December 31, 2020. The Company considers the fair value of the Notes to be a Level 2 measurement due to the limited inputs available for its fair valuation.

Nonrecurring fair value measurements of assets:

Nonrecurring fair value measurements include impairment tests of goodwill conducted by the Company during the years ended December 31, 2021 and 2020. The fair value determination of the Company's reporting units was based on a combination of the income approach, using DCF model, which are Level 3 inputs, and also the market approach, as applicable, using market multiples for reporting units, which are Level 2 inputs. During the years ended December 31, 2021 and 2020, the Company did not recognize any impairment charges on goodwill as the fair values of the reporting units exceeded their carrying value. Refer to Note 9 - Business Combinations, Goodwill and Intangible Assets to the consolidated financial statements for further details.

During the year ended December 31, 2019, the Company conducted impairment tests of its long-lived assets and ROU assets related to its Health Integrated business. The fair value determination for ROU assets was based on third party quotes, which are Level 2 inputs, and for other long-lived assets, it was based on Company’s internal assessment, which are Level 3 inputs. During the year ended December 31, 2019, the Company recognized impairment charges on long-lived assets and ROU assets to write down the carrying value to their fair values. Refer to Note 8 - Property and Equipment, net and Note 20 - Leases to the consolidated financial statements for further details.