Fair Value Measurements

9 Months Ended

Mar. 31, 2015

A three-tier fair value hierarchy is utilized to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are defined as follows:


•	Level 1 Inputs - unadjusted quoted prices in active markets for identical assets or liabilities;


•	Level 2 Inputs - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and


•	Level 3 Inputs - unobservable inputs reflecting the Company's own assumptions in measuring the asset or liability at fair value.

The Company uses forward foreign currency contracts to hedge market risks relating to possible adverse changes in foreign exchange rates.

The following table presents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis (in thousands):



March 31, 2015	Level 1		Level 2		Level 3		Total
Assets
Investments:
Money market funds	$	19,779	$	—	$	—	$	19,779
Corporate notes/bonds	—		1,506		—		1,506
Non-marketable equity investment	—		—		3,000		3,000
Total	$	19,779	$	1,506	$	3,000	$	24,285



June 30, 2014	Level 1		Level 2		Level 3		Total
Assets
Investments:
Money market funds	$	567	$	—	$	—	$	567
Corporate notes/bonds	—		32,692		—		32,692
Foreign currency forward contracts	—		21		—		21
Total	$	567	$	32,713	$	—	$	33,280

Level 2 investment valuations are based on inputs such as quoted market prices of similar instruments, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, and state, municipal and provincial obligations. There were no transfers of assets or liabilities between Level 1 and Level 2 during the three and nine months ended March 31, 2015.

During the quarter, the Company obtained a $3.0 million equity interest in a Company that operates in the enterprise software platform industry. The Company has not entered into any other transactions with the entity that are considered significant to the Company’s consolidated financial statements during the three and nine months ended March 31, 2015.

The Company reflects a non-marketable equity investment as Level 3 in the fair value hierarchy as it is based on unobservable inputs that market participants would use in pricing this asset due to the absence of recent comparable market transactions and inherent lack of liquidity. Significant inputs and assumptions are management’s estimate of the enterprise value used to calculate the present value of the asset. Significant changes in any Level 3 input or assumption would result in increases or decreases to fair value measurements for this asset.

There were no liabilities as of March 31, 2015 that were being measured using fair value on a recurring basis. The fair values of accounts receivable, accounts payable, and accrued liabilities, due within one year approximates their carrying values due to their short-term nature.

The Company does not have any assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2015, and June 30, 2014.

- 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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