Fair Value Measurements

12 Months Ended

Dec. 31, 2015

The fair value hierarchy of the Company's financial assets carried at fair value and measured on a recurring basis was as follows (in thousands):



	December 31, 2015		Fair value measurements at the reporting date using
	December 31, 2015		Quoted prices in active markets using identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Cash equivalents:
Money market and other funds	$	5,410	$	—	$	5,410	$	—
Available-for-sale investments:
Debt securities:
U.S. government securities	11,301		—		11,301		—
Total assets at fair value	$	16,711	$	—	$	16,711	$	—

Contingent consideration liability	$	2,951	$	—	$	—	$	2,951
Total liabilities at fair value	$	2,951	$	—	$	—	$	2,951



	December 31, 2014		Fair value measurements at the reporting date using
	December 31, 2014		Quoted prices in active markets using identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Cash equivalents:
Money market and other funds	$	8,322	$	—	$	8,322	$	—
Time deposits	1,242		—		1,242		—
Taxable municipal bonds	4,754		—		4,754		—
Total cash equivalents	14,318		—		14,318		—
Available-for-sale investments:
Debt securities:
U.S. government securities	100,818		—		100,818		—
International government securities	6,560		—		6,560		—
Commercial paper	24,589		—		24,589		—
Time deposits	30,759		—		30,759		—
Corporate bonds	1,528		—		1,528		—
Taxable municipal bonds	87,366		—		87,366		—
Total debt securities	251,620		—		251,620		—
Total assets at fair value	$	265,938	$	—	$	265,938	$	—

The Company also had financial instruments that were not measured at fair value. See "Note 8: Debt" for details.

A reconciliation of changes in Level 3 items measured at fair value on a recurring basis was as follows (in thousands):



Contingent consideration liability:
Balance as of December 31, 2014	$	—
Initial estimate upon acquisition	3,274
Foreign currency transaction gain	(323		)
Balance as of December 31, 2015	$	2,951

The contingent consideration liability is related to the Company's acquisition of SimpleTax (see "Note 3: Business Combinations"), and the related payments are expected to occur annually beginning in 2017 and continuing through 2019. As of December 31, 2015, the Company could be required to pay up to an undiscounted amount of $3.3 million. The Company has determined the fair value of the contingent consideration liability based on a probability-weighted discounted cash flow analysis, which includes assumptions related to estimating revenues, the probability of payment (100%), and the discount rate (9%). A decrease in estimated revenues would decrease the fair value of the contingent consideration liability, while a decrease in the discount rate would increase the fair value of the contingent consideration liability. As of December 31, 2015, the Company recorded the entire contingent consideration liability in "Other long-term liabilities" on the consolidated balance sheets.

The Company had non-recurring Level 3 fair value measurements in 2015 and 2014 related to its reporting units and various intangible assets as part of goodwill and intangible asset impairment reviews. See "Note 4: Discontinued Operations" for details.

The contractual maturities of the debt securities classified as available-for-sale at December 31, 2015 and 2014 were less than one year.

The cost and fair value of available-for-sale investments were as follows (in thousands):



	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Balance as of December 31, 2015	$	11,316	$	—	$	(15	)	$	11,301
Balance as of December 31, 2014	$	251,673	$	16	$	(69	)	$	251,620

- 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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