Fair Value

12 Months Ended

Dec. 31, 2019

10.	Fair Value

The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term nature of these instruments. Fair value estimates are made at a specific point in time, based on relevant market information.

The following tables present the fair value hierarchy for those assets measured at fair value on a recurring basis (U.S. dollars in thousands):

	Fair Value at December 31, 2019
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents and current investments	$	54,642	$	—	$	—	$	54,642
Other long-term assets		3,216		—		—		3,216
Life insurance contracts		—		—		41,707		41,707
Total	$	57,858	$	—	$	41,707	$	99,565

	Fair Value at December 31, 2018
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents and current investments	$	35,260	$	—	$	—	$	35,260
Other long-term assets		3,568		—		—		3,568
Life insurance contracts		—		—		35,590		35,590
Total	$	38,828	$	—	$	35,590	$	74,418

The following methods and assumptions were used to determine the fair value of each class of assets recorded at fair value in the consolidated balance sheets:

Cash equivalents and current investments: Cash equivalents and current investments primarily consist of highly rated money market funds with maturities of three months or less, and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, the Company considers all cash equivalents and current investments as Level 1. Current investments include $8.4 million and $11.3 million as of December 31, 2019 and 2018, respectively, that is restricted for the Company’s voluntary participation in a consumer protection cooperative in South Korea.

Life insurance contracts: ASC 820 preserves practicability exceptions to fair value measurements provided by other applicable GAAP. The guidance in ASC 715-30-35-60 allows a reporting entity, as a practical expedient, to use cash surrender value or conversion value as an expedient for fair value when it is present. Accordingly, the Company determines the fair value of its life insurance contracts as the cash-surrender value of life insurance policies held in its Rabbi Trust as disclosed in Note 13, “Executive Deferred Compensation Plan.”

The following table provides a summary of changes in fair value of the Company’s Level 3 marketable securities (U.S. dollars in thousands):

Life Insurance Contracts	2019			2018
Beginning balance at January 1	$	35,590		$	37,737
Actual return on plan assets		5,688			(1,788	)
Purchases and issuances		2,003			—
Sales and settlements		(1,574	)		(359	)
Transfers into Level 3		—			—
Ending balance at December 31	$	41,707		$	35,590

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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