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FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended
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Sep. 30, 2021
Fair Value Disclosures [Abstract] |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures its cash equivalents, customer funds, short-term and long-term marketable debt securities, and marketable equity investment at fair value. The Company classifies these investments within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are classified as follows (in thousands):
| September 30, 2021 |  | December 31, 2020
| Level 1 |  | Level 2 |  | Level 3 |  | Level 1 |  | Level 2 |  | Level 3
Cash Equivalents: |  |  |  |  |  |  |  |  |  |  |
Money market funds | $ | 2,495,120 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,694,736 |  |  | $ | — |  |  | $ | — |
U.S. agency securities | — |  |  | — |  |  | — |  |  | — |  |  | 41,186 |  |  | — |
Certificates of deposit | — |  |  | 1,500 |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial paper | — |  |  | 46,150 |  |  | — |  |  | — |  |  | — |  |  | — |
Corporate bonds | — |  |  | 1,500 |  |  | — |  |  | — |  |  | — |  |  | — |
U.S. government securities | — |  |  | — |  |  | — |  |  | 15,000 |  |  | — |  |  | — |
Customer funds: |  |  |  |  |  |  |  |  |  |  |
Money market funds | 1,485,002 |  |  | — |  |  | — |  |  | 777,193 |  |  | — |  |  | — |
Reverse repurchase agreement | 402,097 |  |  | — |  |  | — |  |  | 246,880 |  |  | — |  |  | — |
U.S. agency securities | — |  |  | 53,564 |  |  | — |  |  | — |  |  | 160,478 |  |  | — |
U.S. government securities | 546,205 |  |  | — |  |  | — |  |  | 445,142 |  |  | — |  |  | — |
Short-term debt securities: |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities | — |  |  | 94,088 |  |  | — |  |  | — |  |  | 154,004 |  |  | — |
Certificates of deposit | — |  |  | 8,200 |  |  | — |  |  | — |  |  | — |  |  | — |
Corporate bonds | — |  |  | 290,523 |  |  | — |  |  | — |  |  | 77,199 |  |  | — |
Commercial paper | — |  |  | 141,551 |  |  | — |  |  | — |  |  | 4,999 |  |  | — |
Municipal securities | — |  |  | 15,750 |  |  | — |  |  | — |  |  | 10,431 |  |  | — |
U.S. government securities | 308,323 |  |  | — |  |  | — |  |  | 405,434 |  |  | — |  |  | — |
Foreign government securities | — |  |  | 10,374 |  |  | — |  |  | — |  |  | 43,045 |  |  | — |
Long-term debt securities: |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities | — |  |  | 152,691 |  |  | — |  |  | — |  |  | 169,278 |  |  | — |
Corporate bonds | — |  |  | 704,097 |  |  | — |  |  | — |  |  | 176,014 |  |  | — |
Municipal securities | — |  |  | 21,965 |  |  | — |  |  | — |  |  | 1,060 |  |  | — |
U.S. government securities | 543,180 |  |  | — |  |  | — |  |  | 92,073 |  |  | — |  |  | — |
Foreign government securities | — |  |  | 29,174 |  |  | — |  |  | — |  |  | 25,525 |  |  | — |
Other: |  |  |  |  |  |  |  |  |  |  |
Investment in marketable equity security | — |  |  | — |  |  | — |  |  | 376,258 |  |  | — |  |  | — |
Total | $ | 5,779,927 |  |  | $ | 1,571,127 |  |  | $ | — |  |  | $ | 4,052,716 |  |  | $ | 863,219 |  |  | $ | — |
The carrying amounts of certain financial instruments, including settlements receivable, loans held for investment, accounts payable, customers payable, accrued expenses and settlements payable, approximate their fair values due to their short-term nature. The Company estimates the fair value of its convertible and senior notes based on their last actively traded prices (Level 1) or market observable inputs (Level 2). The estimated fair value and carrying value of the convertible and senior notes were as follows (in thousands):
| September 30, 2021 |  | December 31, 2020
| Carrying Value |  | Fair Value (Level 2) |  | Carrying Value |  | Fair Value (Level 2)
2031 Senior Notes | $ | 986,420 |  |  | $ | 1,032,250 |  |  | $ | — |  |  | $ | — |
2026 Senior Notes | 986,924 |  |  | 1,017,070 |  |  | — |  |  | — |
2027 Convertible Notes | 566,873 |  |  | 685,297 |  |  | 458,496 |  |  | 644,000 |
2026 Convertible Notes | 567,195 |  |  | 659,404 |  |  | 482,204 |  |  | 638,250 |
2025 Convertible Notes | 989,599 |  |  | 2,051,760 |  |  | 858,332 |  |  | 1,912,440 |
2023 Convertible Notes | 640,818 |  |  | 1,982,159 |  |  | 780,046 |  |  | 2,417,820 |
2022 Convertible Notes | 4,637 |  |  | 48,830 |  |  | 7,846 |  |  | 80,731 |
Total | $ | 4,742,466 |  |  | $ | 7,476,770 |  |  | $ | 2,586,924 |  |  | $ | 5,693,241 |
The estimated fair value and carrying value of loans held for sale and loans held for investment is as follows (in thousands):
| September 30, 2021 |  | December 31, 2020
| Carrying Value |  | Fair Value (Level 3) |  | Carrying Value |  | Fair Value (Level 3)
Loans held for sale | $ | 708,086 |  |  | $ | 824,640 |  |  | $ | 462,665 |  |  | $ | 467,805 |
Loans held for investment | 79,482 |  |  | 83,760 |  |  | — |  |  | — |
Total | $ | 787,568 |  |  | $ | 908,400 |  |  | $ | 462,665 |  |  | $ | 467,805 |
As of September 30, 2021, $605.4 million of the carrying value of loans held for sale was attributable to loans under the PPP. As the loans under the PPP qualify for forgiveness if certain criteria are met or are guaranteed by the U.S. government through the Small Business Administration ("SBA"), the related credit losses as of September 30, 2021 were immaterial. As of September 30, 2021, $434.2 million in PPP loans held for sale have been forgiven by the SBA, of which $97.6 million and $387.9 million have been forgiven in the three and nine months ended September 30, 2021, respectively. The loan forgiveness resulted in the recognition of $13.3 million and $37.6 million revenue associated with the forgiveness of the PPP loans for the three and nine months ended September 30, 2021, respectively. The Company approved and funded the last of its remaining PPP applications upon exhaustion of the funds in the program on May 21, 2021. For the three and nine months ended September 30, 2021, the Company recorded a charge for the excess of amortized cost over fair value of the loans held for sale of $4.4 million and $6.0 million, respectively. For the three and nine months ended September 30, 2020, the Company recorded a charge for the excess of amortized cost over fair value of the loans of $3.2 million and $25.7 million, respectively. To determine the fair value of the loans held for sale, the Company utilizes industry-standard valuation modeling, such as discounted cash flow models, taking into account the estimated timing and amounts of periodic repayments. In estimating the expected timing and amounts of the future periodic repayments for the loans outstanding as of September 30, 2021, the Company considered other relevant market data in developing such estimates and assumptions, including the continuing impact of the COVID-19 pandemic. With respect to PPP loans, the Company also considers the impact of government guarantees and loan forgiveness on the timing and amounts of future cash flows. As of September 30, 2021, there were no material changes to our estimates, and the Company will continue to evaluate facts and circumstances that could impact our estimates and affect our results of operations in future periods. If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three and nine months ended September 30, 2021 and 2020, the Company did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities.

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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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