Fair value measurement

9 Months Ended

Sep. 30, 2019

Fair value measurement

Fair value measurement

12. Fair value measurement

The following table sets forth our financial assets and liabilities that are measured at fair value on a recurring basis:


At September 30, 2019		Level 1			Level 2			Level 3			Total
Assets:
Money market accounts		$	45,791		$	—		$	—		$	45,791
Marketable securities			4,250			32,344			—			36,594
Total assets		$	50,041		$	32,344		$	—		$	82,385


At December 31, 2018		Level 1			Level 2			Level 3			Total
Assets:
Money market accounts		$	137,723		$	—		$	—		$	137,723
Total assets		$	137,723		$	—		$	—		$	137,723
Liabilities:
Contingent consideration		$	—		$	—		$	961		$	961
Total liabilities		$	—		$	—		$	961		$	961

Our marketable securities utilize Level 1 and Level 2 inputs and consist primarily of corporate debt securities, which primarily include commercial paper and debt instruments including notes issued by foreign or domestic industrial and financial corporations and governments which pay in U.S. dollars and carry a rating of A or better. We have evaluated the various types of securities in our investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the

observability of market inputs. Due to variations in trading volumes and the lack of quoted market prices in active markets, our fixed maturity securities are classified as Level 2 securities. Our marketable securities are valued at amortized cost, which approximates fair value. The fair value of our fixed maturity marketable securities is derived through the use of a third-party pricing source using recent reported trades for identical or similar securities, making adjustments through the reporting date based upon available market observable data.

The Company’s contingent consideration obligation was initially recorded at fair value using probability-weighted discounted cash flow approaches that are based on significant unobservable inputs related to achievement of estimated annual sales and are reviewed quarterly. Significant changes to estimated annual sales and discount rates would result in corresponding changes in the fair value of this obligation. The following table presents a reconciliation of the beginning and ending amounts related to the fair value of contingent consideration categorized as Level 3:


Balance , December 31, 2018		$	961
Payment of contingent consideration			—
Change in fair value			—
Balance, June 30, 2019			961
Payment of contingent consideration			—
Change in fair value			(961)
Balance , September 30, 2019		$	—

We do not expect to make any payments for the contingent consideration related to the Elauwit acquisition. The change in fair value of contingent consideration was recorded in general and administrative expenses in the condensed consolidated statements of operations.

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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