3. Fair Value Measurement and Marketable Securities

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in its assessment of fair value.

As of June 30, 2025, financial assets measured and recognized at fair value are as follows (in thousands):


		June 30, 2025
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Assets
U.S. government securities	Level 2	$	510,168	$	966	$	(77	)	$	511,057
Corporate bonds	Level 2		347,586		700		(59	)		348,227
Commercial paper	Level 2		37,591		—		(9	)		37,582
Subtotal			895,345		1,666		(145	)		896,866
Money market funds	Level 1		76,261		—		—			76,261
Cash			18,742		—		—			18,742
Total fair value of assets		$	990,348	$	1,666	$	(145	)	$	991,869
Included in cash and cash equivalents(1)			114,648		—		(3	)		114,645
Included in marketable securities, current(2)			554,405		778		(90	)		555,093
Included in marketable securities, non-current(3)			321,295		888		(52	)		322,131
Total fair value of assets		$	990,348	$	1,666	$	(145	)	$	991,869

(1) $19.6 million of commercial paper was included in cash and cash equivalents on the condensed balance sheet due to securities with

purchase dates within 90 days of maturity dates.

(2) The Company’s short-term marketable securities mature in one year or less.

(3) The Company’s long-term marketable securities mature between one and three years.

As of December 31, 2024, financial assets measured and recognized at fair value are as follows (in thousands):


		December 31, 2024
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Assets
U.S. government securities	Level 2	$	552,008	$	1,214	$	(353	)	$	552,869
Corporate bonds	Level 2		363,197		357		(419	)		363,135
Commercial paper	Level 2		89,109		21		(8	)		89,122
Subtotal			1,004,314		1,592		(780	)		1,005,126
Money market funds	Level 1		57,626		—		—			57,626
Cash			19,399		—		—			19,399
Total fair value of assets		$	1,081,339	$	1,592	$	(780	)	$	1,082,151
Included in cash and cash equivalents(1)			84,379		—		(1	)		84,378
Included in marketable securities, current(2)			591,089		928		(76	)		591,941
Included in marketable securities, non-current(3)			405,871		664		(703	)		405,832
Total fair value of assets		$	1,081,339	$	1,592	$	(780	)	$	1,082,151

(1) $7.4 million of commercial paper was included in cash and cash equivalents on the condensed balance sheet due to securities with

purchase dates within 90 days of maturity dates.

(2) The Company’s short-term marketable securities mature in one year or less.

(3) The Company’s long-term marketable securities mature between one and three years.

As of June 30, 2025 and December 31, 2024, all marketable securities had a remaining maturity of less than three years. There were no financial liabilities measured and recognized at fair value as of June 30, 2025 and December 31, 2024.

As of June 30, 2025 and December 31, 2024, certain securities were held in an unrealized loss position. Based on review of the portfolio of marketable securities and the creditworthiness of the underlying issuer, the Company determined that the decline in fair value below cost did not result from credit-related factors. Additionally, the Company does not intend to sell these securities, nor will it be required to sell before recovery of the amortized cost basis at maturity. As a result, no credit-related losses have been recognized for any of the periods presented.

IDEAYA Biosciences, Inc. 10-Q