Fair Value Measurement

12 Months Ended

Dec. 31, 2020

23. Fair Value Measurement

Assets and liabilities disclosed at fair value

The Company’s cash and cash equivalents, restricted cash, accounts receivables, other current assets, accounts payable and other current liabilities are not measured at fair value in the consolidated balance sheets, as their carrying values approximated fair value due to their short-term maturity.

Assets measured at fair value on a nonrecurring basis

The Company measured its property, equipment and software, equity investments under measurement alternative, intangible assets and goodwill at fair value on a nonrecurring basis whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable.

Assets and liabilities measured at fair value on a recurring basis

The Group accounts for financial guarantee provided to a commercial bank related to its referral services (Note 2(h)) at fair value. The Group uses significant unobservable inputs to measure the fair value of these guarantee derivative assets or liabilities (Level 3).

The following table presents the fair value hierarchy for the Group's assets and liabilities that are measured and recorded at fair value as of December 31, 2020 (December 31, 2019: nil):


	For the year ended
	December 31,2020
	Level 1 Inputs	Level 2 Inputs	Level 3 Inputs	Balance at fair value
	RMB	RMB	RMB	US$
Guarantee liabilities	—	—	387	59

Significant Unobservable Inputs

The following table presents quantitative information about the significant unobservable inputs used for the Group's Level 3 fair value measurement as of December 31, 2020:


	Unobservable Input	Range of Inputs
Guarantee liabilities	Default rate	0.075%~2.8	%
	Reasonable operating profit margin	10	%

The following table summarizes the activities related to fair value of the guarantee derivatives:


	For the Year Ended
	December 31,
	2019	2020
	(RMB in thousands)
Fair value of guarantee liabilities at beginning of the year (Level 3)	Not applicable	—
Issuances	Not applicable	143
Net cash payout	Not applicable	11
Change in fair value	Not applicable	233
Fair value of guarantee liabilities at end of the year (Level 3)	Not applicable	387

- 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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