Fair value measurements

6 Months Ended

Jun. 30, 2019

The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1 or 2 within the fair value hierarchy as described in the accounting standards for fair value measurements.

The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance prioritizes the inputs used in measuring fair value into the following hierarchy:


•	Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities;


•	Level 2- Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and


•	Level 3- Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The following tables summarize the assets measured at fair value on a recurring basis (in thousands):



	June 30, 2019
	Total		Level 1		Level 2
Assets
Cash and cash equivalents:
Cash	$	1,310	$	1,310	$	—
Money market funds	250,782		250,782		—
Total cash and cash equivalents	252,092		252,092		—

Short-term investments:
U.S. Treasury bills	18,946		18,946		—
Corporate debt securities	117,109		—		117,109
Commercial paper	89,386		—		89,386
U.S. Agency bonds	5,998		—		5,998
Other sovereign securities	1,996		—		1,996
Total short-term investments	233,435		18,946		214,489
Total	$	485,527	$	271,038	$	214,489



	December 31, 2018
	Total		Level 1		Level 2
Assets
Cash and cash equivalents:
Cash	$	3,731	$	3,731	$	—
Money market funds	28,963		28,963		—
Total cash and cash equivalents	32,694		32,694		—

Short-term investments:
U.S. Treasury bills	3,771		3,771		—
Corporate debt securities	111,916		—		111,916
Commercial paper	74,409		—		74,409
Total short-term investments	190,096		3,771		186,325
Total	$	222,790	$	36,465	$	186,325

The Company’s investments in Level 1 assets are valued based on publicly available quoted market prices for identical securities as of June 30, 2019 and December 31, 2018. The Company determines the fair value of Level 2 related securities with the aid of valuations provided by third parties using proprietary valuation models and analytical tools. These valuation models and analytical tools use market pricing or prices for similar instruments that are both objective and publicly available, including matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids and/or offers. There were no transfers between fair value measurement levels during the three and six months ended June 30, 2019 or the year ended December 31, 2018.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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