HARVARD BIOSCIENCE INC Fair Value Disclosure
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13. |
Fair Value Measurements |
The following tables present the fair value hierarchy for those assets or liabilities measured at fair value on a recurring basis:
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Fair Value as of December 31, 2024 |
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Assets (Liabilities) (in thousands) |
Level 1 |
Level 2 |
Level 3 |
Total |
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Interest rate swap agreement |
$ | - | $ | (99 | ) | $ | - | $ | (99 | ) | ||||||
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Fair Value as of December 31, 2023 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Equity securities - common stock |
$ | 3,511 | $ | - | $ | - | $ | 3,511 | ||||||||
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Interest rate swap agreement |
$ | - | $ | (199 | ) | $ | - | $ | (199 | ) | ||||||
The Company uses the market approach technique to value its financial assets and liabilities. The Company’s financial assets and liabilities carried at fair value include, when applicable, investments in common stock and derivative instruments used to hedge the Company’s interest rate risks. The fair value of the Company’s interest rate swap agreement was based on SOFR-yield curves at the reporting date. The fair value of the Company’s investment in common stock of Harvard Apparatus Regenerative Technologies (“HRGN” formerly known as Biostage, Inc.) was based on the closing price as quoted on the OTCQB Marketplace at the reporting date.
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.