Fair Value Measurements

3 Months Ended

Jun. 30, 2020

5. Fair Value Measurements

Accounting standards provide a framework for establishing the fair value of assets and liabilities presented in the financial statements. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value. The GUC Trust’s Cash Equivalents, Marketable Securities, and Liquidating Distributions Payable are presented as provided by this hierarchy.

Level 1—In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets and liabilities that the GUC Trust has the ability to access.

Level 2—Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets or liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3—Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability. These Level 3 fair value measurements are based primarily on management’s own estimates using pricing models, discounted cash flow methodologies, or similar techniques taking into account the characteristics of the asset or liability. The GUC Trust had no assets or liabilities that are measured with Level 3 inputs as of June 30 and March 31, 2020.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The GUC Trust’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

The GUC Trust also holds other financial instruments not measured at fair value on a recurring basis, including Accounts Payable and Other Liabilities. The fair value of these liabilities approximates the carrying amounts in the accompanying financial statements due to the short maturity of such instruments.

The following table presents information about the GUC Trust’s assets and liabilities measured at fair value on a recurring basis as of June 30 and March 31, 2020, and the valuation techniques used by the GUC Trust to determine those fair values.


	June 30, 2020
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	95	$	—	$	—	$	95
Marketable Securities:
U.S. Treasury bills		—		130,013		—		130,013
Total Assets	$	95	$	130,013	$	—	$	130,108
Liabilities:
Liquidating distributions payable	$	54,314	$	—	$	—	$	54,314


	March 31, 2020
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	40,413	$	—	$	—		40,413
Marketable Securities:
U.S. Treasury bills		—		392,777		—		392,777
Total Assets	$	40,413	$	392,777	$	—	$	433,190
Liabilities:
Liquidating distributions payable	$	351,876	$	—	$	—	$	351,876

The following are descriptions of the valuation methodologies used for assets and liabilities measured at fair value:

•

Due to their short-term liquid nature, the fair value of cash equivalents approximates their carrying value.

•

Marketable securities consist of U.S. Treasury bills. Due to their short-term maturities, the fair value of U.S. Treasury bills approximates their carrying value (when receivables for associated interest income earned included in accrued investment income in the accompanying Condensed Statements of Net Assets in Liquidation are combined with the carrying value of such U.S. Treasury bills).

•

Liquidating distributions payable are valued at the amount of cash that the GUC Trust is obligated to distribute.

Motors Liquidation Co 10-Q