Grace Therapeutics, Inc. Fair Value Disclosure
|
Total
|
Quoted
prices in active markets (Level 1) |
Significant
other observable inputs (Level 2) |
Significant
unobservable inputs (Level 3) | ||||||||||||
| $ | $ | $ | $ | ||||||||||||
|
Assets
|
|||||||||||||||
|
Treasury bills classified as cash equivalents
|
21,304 | 21,304 | — | — | |||||||||||
|
Total assets
|
21,304 | 21,304 | — | — | |||||||||||
|
Liabilities
|
|||||||||||||||
|
Derivative
warrant liabilities
|
1,141 | — | — | 1,141 | |||||||||||
|
Total
liabilities
|
1,141 | — | — | 1,141 |
|
Total
|
Quoted
prices in active markets (Level 1) |
Significant
other observable inputs (Level 2) |
Significant
unobservable inputs (Level 3) | ||||||||||||
| $ | $ | $ | $ | ||||||||||||
|
Assets
|
|||||||||||||||
|
Guaranteed investment certificates and term deposits
classified as cash equivalents
|
19,725 | 19,725 | — | — | |||||||||||
|
Total assets
|
19,725 | 19,725 | — | — | |||||||||||
|
Liabilities
|
|||||||||||||||
|
Derivative warrant liabilities
|
4,359 | — | — | 4,359 | |||||||||||
|
Total liabilities
|
4,359 | — | — | 4,359 |
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.