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FAIR VALUE MEASUREMENTS | 6 Months Ended
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Jun. 30, 2021
FAIR VALUE MEASUREMENTS [Abstract] |
FAIR VALUE MEASUREMENTS |
12. | FAIR VALUE MEASUREMENTS
ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided on fair value measurement. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. In accordance with ASC 820, the Company measures cash equivalents, restricted cash, available-for-sale investments, marketable equity securities investments, investments carried at fair value, certain other assets, derivative instruments and SARs at fair value. The liability component of the 2023 Convertible Notes, 2024 Convertible Notes and 2025 Convertible Notes is measured at fair value on its issuance and extinguishment date. Cash equivalents are classified within Level 1 because they are valued using quoted market prices in active markets for identical assets and liabilities. Derivative instruments are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. As of December 31, 2020 and June 30, 2021, Level 3 assets and liabilities of the Company included investments in exchangeable and convertible loan, investments in sovereign bonds, investments carried at fair value and preference shares of investees and other assets. Investments in debt securities - for short-term investment in debt securities, the carrying amount approximates fair value due to its short-term nature. Other assets – the Company used Market approach to determine the fair value of certain assets by comparing to the sale and purchase transactions of comparable assets in the market, adjusted with differences such as size, physical condition, location and etc. 2023 Convertible Notes, 2024 Convertible Notes and 2025 Convertible Notes – the Company used discounted cash flow method to determine the fair value of the liability component (non-recurring, Level 3). The discounted cash flow taking into the present value of expected future cash flows from coupon interest and redemption amount, discounted by the credit yield as at issuance date with reference to similar instruments that did not have associated convertible features. Investments carried at fair value – the Company used a combination of valuation methodologies, including market and income approaches based on the Company’s best estimate, which is determined by using information including but not limited to the pricing of recent rounds of financing of the investees, future cash flow forecasts, liquidity factors and multiples of a selection of comparable companies. Assets and liabilities measured at fair value on a recurring basis are summarized below:
|  | Fair value measurement at December 31, 2020 |
|  | Quoted prices in active markets for identical assets (Level 1) $ |  |  | Significant other observable inputs (Level 2) $ |  |  | Unobservable inputs (Level 3) $ |  |  | Total $ |
Cash equivalents |  |  | 74,272 |  |  |  | – |  |  |  | – |  |  |  | 74,272 |
Held to maturity investments |  |  | 100,071 |  |  |  | – |  |  |  | 286 |  |  |  | 100,357 |
Available-for-sale investments |  |  | 5,688 |  |  |  | – |  |  |  | 21,357 |  |  |  | 27,045 |
Equity securities |  |  | 76,000 |  |  |  | – |  |  |  | – |  |  |  | 76,000 |
Other assets |  |  | – |  |  |  | – |  |  |  | 19,024 |  |  |  | 19,024 |
Share appreciation rights |  |  | (11,640 | ) |  |  | – |  |  |  | – |  |  |  | (11,640 | )
|  |  | 244,391 |  |  |  | – |  |  |  | 40,667 |  |  |  | 285,058 |
|  | Fair value measurement at June 30, 2021 |
|  | Quoted prices in active markets for identical assets (Level 1) $ |  |  | Significant other observable inputs (Level 2) $ |  |  | Unobservable inputs (Level 3) $ |  |  | Total $ |
Cash equivalents |  |  | 575,601 |  |  |  | – |  |  |  | – |  |  |  | 575,601 |
Held to maturity investments |  |  | 787,122 |  |  |  | – |  |  |  | 486 |  |  |  | 787,608 |
Available-for-sale investments |  |  | 49,017 |  |  |  | – |  |  |  | 164,459 |  |  |  | 213,476 |
Equity securities |  |  | 55,533 |  |  |  | – |  |  |  | – |  |  |  | 55,533 |
Investments carried at fair value |  |  | – |  |  |  | – |  |  |  | 21,992 |  |  |  | 21,992 |
Other assets |  |  | – |  |  |  | – |  |  |  | 16,221 |  |  |  | 16,221 |
Derivative assets(1) |  |  | – |  |  |  | 67 |  |  |  | – |  |  |  | 67 |
Derivative liabilities (2) |  |  | – |  |  |  | (1,204 | ) |  |  | – |  |  |  | (1,204 | )
Share appreciation rights |  |  | (18,038 | ) |  |  | – |  |  |  | – |  |  |  | (18,038 | )
|  |  | 1,449,235 |  |  |  | (1,137 | ) |  |  | 203,158 |  |  |  | 1,651,256 |
(1) Included in prepaid expenses and other assets in the consolidated balance sheets and not designated as hedges. (2) Included in accrued expenses and other payables in the consolidated balance sheets and not designated as hedges. Reconciliations of assets and liabilities categorized within Level 3 under the fair value hierarchy are as follow:
|  | $ |
Assets: |  |  |
Available-for-sale investments |  |  |
Balance at January 1, 2020 |  |  | 128,418 |
Impairments |  |  | (13,429 | )
Conversion into ordinary shares of investees |  |  | (72,000 | )
Fair value loss included in other comprehensive income |  |  | (5,400 | )
Balance at June 30, 2020 |  |  | 37,589 |
Addition |  |  | 20,429 |
Impairments |  |  | (37,571 | )
Fair value loss included in other comprehensive income |  |  | 910 |
Balance at December 31, 2020 |  | 21,357 |
Addition |  | 146,871 |
Fair value loss included in other comprehensive income |  |  | (3,769 | )
Balance as at June 30, 2021 |  |  | 164,459 |
Investments carried at fair value |  |  |
Balance at January 1, 2020, June 30, 2020 and December 31, 2020 |  |  | – |
Addition |  |  | 21,992 |
Balance at June 30, 2021 |  |  | 21,992 |
Other assets |  |  |
Balance at January 1, 2020 |  |  | – |
Acquisition of subsidiary |  |  | 8,718 |
Additions |  |  | 10,928 |
Disposals |  |  | (45 | )
Exchange differences |  |  | (373 | )
Balance at June 30, 2020 |  |  | 19,228 |
Acquisition of subsidiary |  |  | 142 |
Additions |  |  | 2,412 |
Disposals |  |  | (318 | )
Write-down |  |  | (3,713 | )
Exchange differences |  |  | 1,273 |
Balance at December 31, 2020 |  |  | 19,024 |
Additions |  |  | 186 |
Disposals |  |  | (1,989 | )
Write-down |  |  | (441 | )
Exchange differences |  |  | (559 | )
Balance at June 30, 2021 |  |  | 16,221 |
The Company’s valuation techniques used to measure the fair value were derived from management’s assumptions of estimations.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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