; ForgeRock, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

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Fair Value Measurements
 3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
ASC 820, Fair Value Measurements (“ASC 820”), defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (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. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs.

The standard describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable:
Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, 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; and

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table represents the fair value hierarchy for the Company’s financial assets and liabilities held by value on a recurring basis (in thousands):
March 31, 2022
Level 1 Level 2 Level 3 Total
Assets:
Money market funds $ 58,121  $ —  $ —  $ 58,121 
Total cash equivalents 58,121  —  —  58,121 
Commercial paper —  76,286  —  76,286 
Asset-backed securities —  46,202  —  46,202 
Corporate debt securities —  89,503  —  89,503 
U.S. treasury bonds —  60,794  —  60,794 
Total short-term investments —  272,785  —  272,785 
     Total cash equivalents and short-term investments $ 58,121  $ 272,785  $ —  $ 330,906 
December 31, 2021
Level 1 Level 2 Level 3 Total
Assets:
Money market funds $ 98,333  $ —  $ —  $ 98,333 
Total cash equivalents 98,333  —  —  98,333 
Commercial paper —  78,448  —  78,448 
Asset-backed securities —  51,587  —  51,587 
Corporate debt securities —  85,084  —  85,084 
U.S. treasury bonds —  26,292  —  26,292 
Total short-term investments —  241,411  —  241,411 
Total cash equivalents and short-term investments $ 98,333  $ 241,411  $ —  $ 339,744 

All of the Company’s money market funds are classified as Level 1 in the fair value hierarchy as the valuation is based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets. For certain of the Company’s
financial instruments, including cash held in banks, accounts receivable, accounts payable and accrued expense, the carrying amounts approximate fair value due to their short maturities, and are, therefore, excluded from the fair value tables above.