Esperion Therapeutics, Inc. Fair Value Disclosure
| Level 1 inputs: | Quoted prices for identical assets or liabilities in active markets; | |||||||
| Level 2 inputs: | Observable inputs other than Level 1 prices, such as quoted market prices for similar assets or liabilities or other inputs that are observable or can be corroborated by market data; and | |||||||
| Level 3 inputs: | Unobservable inputs that are supported by little or no market activity and require the reporting entity to develop assumptions that market participants would use when pricing the asset or liability. | |||||||
| Description | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 106,894 | $ | 106,894 | $ | — | $ | — | |||||||||||||||
| Certificates of deposit | 403 | 403 | — | — | |||||||||||||||||||
| Total assets at fair value | $ | 107,297 | $ | 107,297 | $ | — | $ | — | |||||||||||||||
| December 31, 2023 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 68,445 | $ | 68,445 | $ | — | $ | — | |||||||||||||||
| Certificates of deposit | 402 | 402 | — | — | |||||||||||||||||||
| Total assets at fair value | $ | 68,847 | $ | 68,847 | $ | — | $ | — | |||||||||||||||
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.