Investment commitments

  
  
7.    INVESTMENTS (continued)Investments in privately held entities that do not report NAV per share  
Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative, under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income.  
An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution preferences, and conversion rights to the investments we hold.  
Impairment evaluation of equity method investments and investments in privately held entities that do not report NAV per share   
We monitor equity method investments and investments in privately held entities that do not report NAV per share for new developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements, capital-raising events, and merger and acquisition activities. These investments are evaluated on the basis of a qualitative assessment for indicators of impairment by monitoring the presence of the following triggering events or impairment indicators:   
(i)a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; (ii)a significant adverse change in the regulatory, economic, or technological environment of the investee; (iii)a significant adverse change in the general market condition, including the research and development of technology and products that the investee is bringing or attempting to bring to the market; (iv)significant concerns about the investee’s ability to continue as a going concern; and/or (v)a decision by investors to cease providing support or reduce their financial commitment to the investee.   
If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.  
Investment income/loss recognition and classification   
We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified within investment income. Unrealized gains and losses represent:  
(i)changes in fair value for investments in publicly traded companies; (ii)changes in NAV for investments in privately held entities that report NAV per share;(iii)observable price changes for investments in privately held entities that do not report NAV per share; and (iv)our share of unrealized gains or losses reported by our equity method investees.   
Realized gains and losses on our investments represent the difference between proceeds received upon disposition of investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity method investments, if impairments are deemed other than temporary, to their estimated fair value.   
Commitments on investments in privately held entities that report NAV  
We are committed to funding approximately $384.1 million for all investments in privately held entities that report NAV. Our funding commitments expire at various dates over the next 12 years, with a weighted-average expiration of 8.8 years as of September 30, 2022. These investments are not redeemable by us, but we may receive distributions from these investments throughout their terms. Our investments in privately held entities that report NAV generally have expected initial terms in excess of 10 years. The weighted-average remaining term during which these investments are expected to be liquidated was 5.6 years as of September 30, 2022.  
  
31
