Investments and Fair Value of Financial Assets and Liabilities

9 Months Ended

Sep. 30, 2019

Investments and Fair Value of Financial Assets and Liabilities

Investments and Fair Value of Financial Assets and Liabilities

3. Investments and Fair Value of Financial Assets and Liabilities

Investments by security type consisted of the following (in thousands):


	September 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. treasury bills and notes (due within one year)	$	201,045	$	165	$	(8)	$	201,202
U.S. government agency bonds (due within one year)		13,867		9		—		13,876
	$	214,912	$	174	$	(8)	$	215,078


	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. treasury notes (due within one year)	$	79,312	$	—	$	(26)	$	79,286
U.S. government agency bonds (due within one year)		17,704		—		(3)		17,701
	$	97,016	$	—	$	(29)	$	96,987

The following tables present the Company’s fair value hierarchy for its assets and liabilities, which are measured at fair value on a recurring basis (in thousands):


	Fair value measurements at September 30, 2019 using:

	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	109,611	$	—	$	—	$	109,611
Investments:
U.S. government agency bonds		—		13,876		—		13,876
U.S. treasury bills and notes		—		201,202		—		201,202
	$	109,611	$	215,078	$	—	$	324,689


	Fair value measurements at December 31, 2018 using:

	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	282,160	$	—	$	—	$	282,160
U.S. treasury bills		—		24,904		—		24,904
Investments:
U.S. government agency bonds		—		17,701		—		17,701
U.S. treasury notes		—		79,286		—		79,286
	$	282,160	$	121,891	$	—	$	404,051

U.S. government money market funds were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. U.S. treasury notes and U.S. government agency bonds were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy. There have been no changes to the valuation methods during the nine months ended September 30, 2019. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers between Level 1, Level 2 or Level 3 during the nine months ended September 30, 2019.

- 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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