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FAIR VALUE MEASUREMENTS - Note 2

9 Months Ended

Dec. 31, 2016

Cash and Cash Equivalents [Abstract]

FAIR VALUE MEASUREMENTS - Note 2

2. FAIR VALUE MEASUREMENTS

Cash, cash equivalents, and available-for-sale investments, and contingent consideration were (in thousands):

						Gross			Gross						Cash and
			Amortized			Unrealized			Unrealized			Estimated			Cash			Short-Term
As of December 31, 2016			Costs			Gain			Loss			Fair Value			Equivalents			Investments
Cash		$	27,382		$	-		$	-		$	27,382		$	27,382		$	-
Level 1:
Money market funds			6,075			-			-			6,075			6,075			-
Mutual funds			2,000			-			(202)			1,798			-			1,798
Subtotal			35,457			-			(202)			35,255			33,457			1,798
Level 2:
Commercial paper			20,945			4			(2)			20,947			-			20,947
Corporate debt			90,469			57			(65)			90,461			-			90,461
Asset backed securities			22,630			7			(15)			22,622			-			22,622
Mortgage backed securities			367			-			(2)			365			-			365
Agency bond			2,000			1			-			2,001			-			2,001
International government securities			1,000			-			-			1,000			-			1,000
Subtotal			137,411			69			(84)			137,396			-			137,396
Total assets		$	172,868		$	69		$	(286)		$	172,651		$	33,457		$	139,194
Level 3:
Contingent consideration		$	-		$	-		$	-		$	148		$	-		$	-
Total liabilities		$	-		$	-		$	-		$	148		$	-		$	-

						Gross			Gross						Cash and
			Amortized			Unrealized			Unrealized			Estimated			Cash			Short-Term
As of March 31, 2016			Costs			Gain			Loss			Fair Value			Equivalents			Investments
Cash		$	18,596		$	-		$	-		$	18,596		$	18,596		$	-
Level 1:
Money market funds			14,980			-			-			14,980			14,980			-
Mutual funds			2,000			-			(187)			1,813			-			1,813
Subtotal			35,576			-			(187)			35,389			33,576			1,813
Level 2:
Commercial paper			6,794			2			-			6,796			-			6,796
Corporate debt			85,164			78			(28)			85,214			-			85,214
Municipal securities			1,007			-			(1)			1,006			-			1,006
Asset backed securities			24,614			7			(11)			24,610			-			24,610
Mortgage backed securities			2,045			-			(17)			2,028			-			2,028
Agency bond			6,805			1			-			6,806			-			6,806
International government securities			1,000			1			-			1,001			-			1,001
Subtotal			127,429			89			(57)			127,461			-			127,461
Total assets		$	163,005		$	89		$	(244)		$	162,850		$	33,576		$	129,274
Level 3:
Contingent consideration		$	-		$	-		$	-		$	148		$	-		$	-
Total liabilities		$	-		$	-		$	-		$	148		$	-		$	-

Contractual maturities of investments as of December 31, 2016, are set forth below (in thousands):

			Estimated
			Fair Value
Due within one year		$	86,842
Due after one year			52,352
Total		$	139,194

Contingent Consideration and Escrow Liability

The Company's contingent consideration liability and escrow liability, included in other accrued liabilities and noncurrent liabilities on the consolidated balance sheets, was associated with the Quality Software Corporation (QSC) acquisition made in the first quarter of fiscal 2016. Amounts held in escrow were measured at fair value using present value computations. The contingent consideration was measured at fair value using a probability weighted average of the potential payment outcomes that would occur should certain contract milestones be reached. There is no market data available to use in valuing the contingent consideration; therefore, the Company developed its own assumptions related to the achievement of the milestones to evaluate the fair value of the liability. As such, the contingent consideration is classified within Level 3 as described below.

The items are classified as Level 3 within the valuation hierarchy, consisting of contingent consideration and escrow liability related to the QSC acquisition, were valued based on an estimate of the probability of success of the milestones being achieved and present value computations, respectively. The table below presents a roll-forward of the contingent consideration and escrow liability valued using a Level 3 input (in thousands):

			Three Months Ended						Nine Months Ended
			December 31,						December 31,
			2016			2015			2016			2015
Balance at beginning of period		$	216		$	391		$	341		$	-
Purchase price contingent consideration			-			-			-			541
Fair value adjustment			107			-			107			-
Contingent consideration payments			(175)			(50)			(300)			(200)
Balance at end of period		$	148		$	341		$	148		$	341

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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