Monster Beverage Corp Fair Value Disclosure
4.FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES
ASC 820, “Fair Value Measurement”, provides a framework for measuring fair value and requires disclosures regarding fair value measurements. ASC 820 defines fair value as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below.
| ● | Level 1: Quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2: Observable inputs other than Level 1 prices, 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 related assets or liabilities. |
| ● | 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. |
ASC 820 requires the use of observable market inputs (quoted market prices) when measuring fair value and requires a Level 1 quoted price to be used to measure fair value whenever possible.
The following tables present the fair value of the Company’s financial assets and liabilities that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy at:
December 31, 2025 | | Level 1 | | Level 2 | | Level 3 | | Total | ||||
Cash | $ | 1,244,954 | $ | — | $ | — | $ | 1,244,954 | ||||
Money market funds |
| 787,293 |
| — |
| — |
| 787,293 | ||||
Commercial paper | — | 90,419 | — | 90,419 | ||||||||
Certificates of deposit | — | 68,597 | — | 68,597 | ||||||||
Municipal securities | — | 1,882 | — | 1,882 | ||||||||
U.S. treasuries | — | 749,465 | — | 749,465 | ||||||||
Corporate bonds | — | 309,919 | — | 309,919 | ||||||||
Foreign currency derivatives |
| — |
| (1,474) |
| — |
| (1,474) | ||||
Commodity derivatives | — | 35,188 | — | 35,188 | ||||||||
Total | $ | 2,032,247 | $ | 1,253,996 | $ | — | $ | 3,286,243 | ||||
Amounts included in: | ||||||||||||
Cash and cash equivalents | $ | 2,032,247 | $ | 55,870 | $ | — | $ | 2,088,117 | ||||
Short-term investments | — | 677,084 | — | 677,084 | ||||||||
Accounts receivable, net |
| — |
| 33,667 |
| — |
| 33,667 | ||||
Other assets | — | 3,530 | — | 3,530 | ||||||||
Investments | — | 487,329 | — | 487,329 | ||||||||
Accrued liabilities |
| — |
| (3,484) |
| — |
| (3,484) | ||||
Total | $ | 2,032,247 | $ | 1,253,996 | $ | — | $ | 3,286,243 | ||||
December 31, 2024 | | Level 1 | | Level 2 | | Level 3 | | Total | ||||
Cash | $ | 1,103,647 | $ | — | $ | — | $ | 1,103,647 | ||||
Money market funds |
| 396,306 |
| — |
| — |
| 396,306 | ||||
Certificates of deposit | — | 33,334 | — | 33,334 | ||||||||
Foreign currency derivatives |
| — |
| 799 |
| — |
| 799 | ||||
Commodity derivatives | — | (785) | — | (785) | ||||||||
Total | $ | 1,499,953 | $ | 33,348 | $ | — | $ | 1,533,301 | ||||
Amounts included in: | ||||||||||||
Cash and cash equivalents | $ | 1,499,953 | $ | 33,334 | $ | — | $ | 1,533,287 | ||||
Accounts receivable, net |
| — |
| 5,991 |
| — |
| 5,991 | ||||
Other assets | — | 6 | — | 6 | ||||||||
Accrued liabilities |
| — |
| (5,952) |
| — |
| (5,952) | ||||
Other liabilities | — | (31) | — | (31) | ||||||||
Total | $ | 1,499,953 | $ | 33,348 | $ | — | $ | 1,533,301 | ||||
The Company’s valuation of its Level 1 investments is based on quoted market prices in active markets for identical securities. The Company’s valuation of its Level 2 investments is based on other observable inputs, specifically a market approach which utilizes valuation models, pricing systems, mathematical tools and other relevant information for the same or similar securities. The Company’s valuation of its Level 2 foreign currency exchange contracts is based on quoted market prices of the same or similar instruments, adjusted for counterparty risk. There were no transfers between Level 1 and Level 2 measurements during the years ended December 31, 2025 and 2024, and there were no changes in the Company’s valuation techniques.
Assets recognized or disclosed at fair value in the consolidated financial statements on a nonrecurring basis may include items such as property and equipment, goodwill and other intangible assets. These assets are measured at fair value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Nonrecurring fair value measurements were not material for the year ended December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
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.