Quarterly report pursuant to Section 13 or 15(d)

Fair Value

v3.23.1
Fair Value
 3 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
ASC 820, Fair Value Measurement, defines fair value as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories:
Level 1 — Quoted prices for identical instruments in active markets.
Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date.
Level 3 — Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date.
The following table presents carrying values and estimated fair values of financial instruments:
March 31, 2023 December 31, 2022
Hierarchy Carrying Value Fair Value Carrying Value Fair Value
(dollars in thousands)
Liabilities:
Line of credit facility (1)
Level 2 $ 525,000  $ 525,000  $ 514,300  $ 514,300 
(1)     Carrying amount approximates fair value due to the variable interest rate terms of these loans. Carrying value excludes any associated deferred loan costs.
The carrying values of receivables, deposits, and other assets as well as accounts payable and accrued liabilities approximate the fair value for these financial instruments based upon an evaluation of the underlying characteristics, market data, and because of the short period of time between origination of the instruments and their expected realization. The fair value of cash and cash equivalents is classified in Level 1 of the fair value hierarchy.
Non-financial assets such as real estate inventories and goodwill are measured at fair value on a non-recurring basis using a discounted cash flow approach with Level 3 inputs within the fair value hierarchy. This measurement is performed when events and circumstances indicate the asset’s carrying value is not fully recoverable. During the three months ended March 31, 2023 and 2022, the Company determined that none of the real estate inventories or goodwill required impairment.
Prior to being purchased by the Company in June 2022, the Private Placement Warrants were historically measured at fair value on a recurring basis using a Black-Scholes option pricing model. The significant unobservable input as of March 31, 2022 was the volatility rate implied from the Company’s public warrants, which were exchanged on an open market, of 50.6%.
The following table reconciles the beginning and ending balances for the Level 3 recurring fair value measurements during the periods presented:
Three Months Ended March 31,
2023 2022
Warrant liability (dollars in thousands)
Beginning balance $ —  $ 9,185 
Changes in fair value —  5,555 
Ending balance $ —  $ 14,740