Fair Value Measurements

9 Months Ended

Sep. 30, 2025

4. Fair Value Measurements

The Company accounts for certain financial assets at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., 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. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. A three-level hierarchy is used to show the extent and level of judgment used to estimate fair value measurements.

Assets and liabilities measured at fair value on a recurring basis included the following as of September 30, 2025 (in thousands):

          
         Using

          
         Significant

          
         Quoted Prices

         Other

         Significant

          
         in Active

         Observable

         Unobservable

         Total Fair

          
         Markets

         Inputs

         Inputs

         Value as of

          
         (Level 1)

         (Level 2)

         (Level 3)

         September 30, 2025

         Cash equivalents:

Money market funds

324,159

—

—

324,159

         Long-term investment:

Failed Auction Security

—

—

2,406

2,406

Assets and liabilities measured at fair value on a recurring basis included the following as of December 31, 2024 (in thousands):

          
         Using

          
         Significant

          
         Quoted Prices

         Other

         Significant

          
         in Active

         Observable

         Unobservable

         Total Fair

          
         Markets

         Inputs

         Inputs

         Value as of

          
         (Level 1)

         (Level 2)

         (Level 3)

         December 31, 2024

         Cash equivalents:

Money market funds

246,745

—

—

246,745

         Long-term investment:

Failed Auction Security

—

—

2,641

2,641

The change in the estimated fair value calculated for the investment valued on a recurring basis utilizing Level 3 inputs (i.e., the Failed Auction Security) for the nine months ended September 30, 2025 was as follows (in thousands):


Balance at the beginning of the period	$	2,641
Loss included in Other comprehensive income		(235	)
Balance at the end of the period	$	2,406

Management utilized a probability weighted discounted cash flow model to determine the estimated fair value as of September 30, 2025.

- Definition

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.

+ References

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-Topic 820
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Reference 2: http://www.xbrl.org/2003/role/exampleRef
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Reference 3: http://www.xbrl.org/2003/role/exampleRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

VICOR CORP 10-Q