XML 29 R11.htm IDEA: XBRL DOCUMENT v3.24.0.1
INVESTMENTS AND FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
INVESTMENTS AND FAIR VALUE MEASUREMENT INVESTMENTS AND FAIR VALUE MEASUREMENTS
Accounting Standards Codification (ASC) 820 “Fair Value Measurement” (ASC 820) defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable:

Level 1:
Quoted prices in active markets for identical assets or liabilities;
Level 2:
Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and
Level 3:Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table presents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022, respectively (in thousands):
Total Carrying ValueLevel 1Level 2Level 3
December 31, 2023
Assets:    
Funds held for clients
Money market funds$3,431 $3,431 $— $— 
Available-for-sale securities71,770 — 71,770 — 
Total$75,201 $3,431 $71,770 $— 
December 31, 2022
Assets:
Cash equivalents
Money market funds$— $— $— $— 
Funds held for clients
Money market funds2,829 2,829 — — 
Available-for-sale securities56,556 — 56,556 — 
Total$59,385 $2,829 $56,556 $— 
Liabilities:
Contingent purchase consideration(1)
$2,954 $— $— $2,954 
Total$2,954 $— $— $2,954 
(1)See Note 2 — Business Combinations for further discussion regarding the contingent purchase consideration.

The contractual obligations and earn out provision are accounted for as a contingent liability and fair value is determined using Level 3 inputs, as estimating the fair value of these contingent liabilities require the use of significant and subjective inputs that may and are likely to change over the duration of the liabilities. The following table discloses the change in the gross contingent purchase consideration on our Consolidated Balance Sheets as of December 31, 2023 (in thousands):
December 31, 2022$2,954 
Contingent purchase consideration paid(3,129)
Change in fair value of contingent liability175 
December 31, 2023$— 
Restricted cash equivalents and investments classified as available-for-sale within funds held for clients consisted of the following (in thousands):
Amortized
Cost
Gross
Unrealized
Gains (1)
Gross
Unrealized
Losses (1)
Aggregate
Estimated
Fair Value
December 31, 2023
Restricted cash equivalents$3,447 $— $(16)$3,431 
Available-for-sale securities:
Certificates of deposit845 2 (1)846 
Corporate debt securities67,277 258 (1,090)66,445 
Municipal bonds4,251 — (239)4,012 
U.S. Government agency securities500 — (33)467 
Total available-for-sale securities72,873 260 (1,363)71,770 
Total(2)
$76,320 $260 $(1,379)$75,201 
December 31, 2022
Restricted cash equivalents$2,829 $— $— $2,829 
Available-for-sale securities:
Certificates of deposit983 4 (2)985 
Corporate debt securities52,251 1 (2,023)50,229 
Municipal bonds5,297 — (405)4,892 
U.S. Government agency securities500 — (50)450 
Total available-for-sale securities59,031 5 (2,480)56,556 
Total(2)
$61,860 $5 $(2,480)$59,385 

(1)Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. As of December 31, 2023 and December 31, 2022, there were 54 and 3 securities, respectively, in an unrealized gain position and there were 113 and 124 securities in an unrealized loss position, respectively. As of December 31, 2023, these unrealized losses were less than $61 individually and $1,363 in the aggregate. As of December 31, 2022, these unrealized losses were less than $96 individually and $2,480 in the aggregate. We invest in high quality securities with roughly 70% of our portfolio made up of A ratings and above with unrealized losses primarily attributable to macroeconomic factors rather than credit related. These securities have not been in a continuous unrealized gain or loss position for more than 12 months. We do not intend to sell these investments and we do not expect to sell these investments before recovery of their amortized cost basis, which may be at maturity. We review our investments to identify and evaluate investments that indicate possible credit losses. Factors considered in determining whether a loss is a credit loss include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

(2)At December 31, 2023 and December 31, 2022, none of these securities were classified as cash and cash equivalents on the accompanying Consolidated Balance Sheets.

Funds held for clients represent assets that the we have classified as restricted for use solely for the purposes of satisfying the obligations to remit funds relating to our payroll and payroll tax filing services, which are classified as client funds obligations on our Consolidated Balance Sheets.

Funds held for clients have been invested in the following categories (in thousands):
20232022
Restricted cash and cash equivalents held to satisfy client funds obligations$147,305 $147,032 
Restricted short-term marketable securities held to satisfy client funds obligations10,042 9,174 
Restricted long-term marketable securities held to satisfy client funds obligations61,728 47,382 
Total funds held for clients$219,075 $203,588 
Expected maturities of available-for-sale securities as of December 31, 2023 are as follows (in thousands):
One year or less$10,042 
After one year through five years61,728 
 $71,770