82 Critical Accounting Policies, Signific f ant Judgments and Use of Estimates Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affe f ct the reported amounts of assets and liabi a lities, the disclosure of contingent assets and liabi a lities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonabl a e under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabi a lities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Accrued Research and Develop l ment Our accrue r d research and development costs are estimated based on the level of services performed, including the phase or completion of events, and contracted costs. Accrue r d clinical trial and related costs are estimated using data such as patient enrollment, clinical site activations or information provided by outside service providers regarding their actual costs incurred. Management determined accrua r l estimates through reports from and discussions with clinical personnel and outside service providers as to the progress of trials, or the services completed. The estimated costs of research and development provided, but not yet invoiced, are included in accrue r d liabi a lities and other current liabi a lities on the consolidated balance sheet. If the actua t l timing of the performance of services or the level of effo f rt varies from the original estimates, we will adju d st the accrua r l accordingly. Payments made to third parties under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other assets until the services are rendered. Stoc t k-Ba - sed Compensation We measure and recognize compensation expense for all stock-based awards made to employees, directors and non-employees, based on estimated fair values of the awards on the grant date and recognized using the straight-line method over the requisite service period. The fair value of options is estimated on the grant date using the Black-Scholes option valuation model or Monte Carlo simulation model. The calculation of stock-based compensation expense requires that we make certain assumptions and judgments about a number of complex and subj u ective variables used in the valuation model, including the expected term, expected volatility of the underlying common stock and risk-fre f e interest rate. Our stock-based awards are subj u ect to either service, performance-based or market-based vesting conditions. We evaluate whether achievement of the performance conditions is probabl a e and record expense over the appropriate service period based on this assessment. Changes in these assumptions can materially affe f ct the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subj u ective and generally require significant analysis and judgment to develop. See Note 12 to our consolidated financial statements for stock-based compensation expense and related assumptions used in determining the fair value of our awards. Impai m rm i ent of Long-L g ived Assets We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverabl a e. Recoverabi a lity is measured by comparison of the carrying amount of the assets to the estimated undiscounted net cash flows which the assets are expected to generate. If such assets are deemed not recoverabl a e, an impairment loss is recognized in the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. We applied significant judgment in determining we have one asset group and that there is no lower level to group assets for impairment testing. The determination of the asset group primarily considers the interdependencies of our assets, shared cost structur t e, and the interrelated future cash flow generation. We assessed the recoverabi a lity of our asset group in 2023 based on our decision to wind-down the tarcocimab a program following the topline results from the Phase 3 GLEAM and GLIMMER studi t es. We determined that the estimated undiscounted net cash flows which the asset group is forecasted to generate exceeded the carrying amount of the asset group and therefor f e, no impairment loss was recognized in 2023. Recent Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is discussed under Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.