Etsy 2015 Annual Report Download - page 90
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Etsy, Inc.
Notes to Consolidated Financial Statements
During the second quarter of 2015, the Company recognized changes to assets and liabilities impacting the associated purchase price allocations of ALM and
Grand St. at their respective dates of acquisition. These adjustments resulted in a decrease to the initial purchase price allocation of goodwill for ALM and
Grand St. of $0.4 million and $0.2 million, respectively.
The Company has characterized its investments in marketable securities, based on the priority of the inputs used to value the investments, into a three-level
fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), and
lowest priority to unobservable inputs (Level 3). If the inputs used to measure the investments fall within different levels of the hierarchy, the categorization
is based on the lowest level input that is significant to the fair value measurement of the investment. Investments recorded in the accompanying consolidated
balance sheet are categorized based on the inputs to valuation techniques as follows:
Level 1—These are investments where values are based on unadjusted quoted prices for identical assets in an active market that the Company has the
ability to access.
Level 2—These are investments where values are based on quoted market prices in markets that are not active or model derived valuations in which all
significant inputs are observable in active markets.
Level 3—These are liabilities where values are derived from techniques in which one or more significant inputs are unobservable.
The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and December 31, 2015
using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level
3) (in thousands):
Asset
Cash equivalents:
Money market funds $ 20,288
$ —
$ —
$ 20,288
U.S. Government bills 2,426
—
—
2,426
22,714
—
—
22,714
Short-term investments:
U.S. Government and agency bills 19,184
—
—
19,184
$ 41,898
$ —
$ —
$ 41,898
Liability
Put option classified as liability $ —
$ —
$ 16
$ 16
Acquisition–related contingent consideration classified as liability —
—
3,374
3,374
Warrants classified as liability —
—
1,920
1,920
$ —
$ —
$ 5,310
$ 5,310
Asset
Cash equivalents:
Money market funds $ 212,390
$ —
$ —
$ 212,390
U.S. Government bills 3
—
—
3
212,393
—
—
212,393
Short-term investments:
U.S. Government and agency bills 21,620
—
—
21,620
$ 234,013
$ —
$ —
$ 234,013
Liability
Put option classified as liability $ —
$ —
$ —
$ —
Acquisition–related contingent consideration classified as liability —
—
2,357
2,357
$ —
$ —
$ 2,357
$ 2,357
85