FAIR VALUE MEASUREMENT |
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| FAIR VALUE MEASUREMENT | 22. FAIR VALUE MEASUREMENT The following table sets forth the financial instruments, measured at fair value, by level within the fair value hierarchy on a recurring basis as of December 31, 2024 and 2025:
22. FAIR VALUE MEASUREMENT (Continued)
22. FAIR VALUE MEASUREMENT (Continued) Reconciliations of assets categorized within Level 3 under the fair value hierarchy are as follow: Short-term investments:
Long-term investments:
(i)Recognized as “Fair value changes in investments, net” on the consolidated statements of comprehensive income. 22. FAIR VALUE MEASUREMENT (Continued) Assets Measured at Fair Value on a Non-Recurring Basis Investments without readily determinable fair value The Group measures equity method investments at fair value on a non-recurring basis only if an impairment charge is recognized. For those equity investments without readily determinable fair value and accounted for other than under the equity method, the Group measures them at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. If this measurement alternative is elected, changes in the carrying value of the equity investments will be required to be made whenever there are observable price changes in transactions for identical or similar investments of the same issuer. The implementation guidance notes that an entity should make a “reasonable effort” to identify price changes that are known or that can reasonably be known. As of December 31, 2024 and 2025, certain investments were assessed for impairment by considering factors, including but not limited to, the stage of development, the business plan, the financial condition, the sufficiency of funding and the operating performance of the investee companies. These investments were measured using unobservable inputs (Level 3) and written down from their respective carrying values to fair value,with impairment charges incurred and recorded in consolidated statements of comprehensive income for the years then ended. Non-financial assets The Group’s non-financial assets, such as intangible assets, goodwill and property, plant and equipment, would be measured at fair value only if they were determined to be impaired. The Group reviews long-lived assets and certain identifiable intangible assets other than goodwill for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Impairment loss for those assets was recognized based on the impairment test using the discounted cash flow method. The impairment recognized on the intangible assets and long-lived assets based on management’s assessment amounted to nil, RMB53.4 million and nil for the years ended December 31, 2023, 2024 and 2025, respectively. The Group has a policy to perform goodwill impairment testing at the reporting unit level on December 31 annually, and between annual tests whenever a triggering event occurs. When performing the quantitative impairment test at the reporting unit level, the Group considers a number of factors including but not limited to expected future cash flows, growth rates, discount rates, and comparable multiples from publicly traded companies in the industry. The impairment recognized on goodwill based on management’s assessment amounted to RMB93.4 million, RMB98.2 million and RMB116.3 million for the years ended December 31, 2023, 2024 and 2025, respectively. The fair value of reporting units was determined using Level 3 inputs. |
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