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Fair Value Measurements
6 Months Ended
Jun. 30, 2013
Fair Value Measurements

4. Fair Value Measurements

Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

 

 

Level 1 — defined as observable inputs such as quoted prices in active markets

 

 

Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable

 

 

Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions

Marketable securities classified in Level 1 and Level 2 at December 31, 2012 consist of available-for-sale marketable securities. The Company did not hold any marketable securities as of June 30, 2013. The valuation of Level 1 instruments is determined using a market approach, and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of investments classified in Level 2 also is determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper and corporate notes that use as their basis readily observable market parameters.

 

As of June 30, 2013, the Company did not hold any assets that are required to be measured at fair value on a recurring basis.

As of December 31, 2012, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows:

 

     Fair Value Measurements at Reporting Date Using  
(in thousands)    December 31,
2012
     Quoted Prices in
Active  Markets for
Identical Assets
(Level 1)
     Significant Other
Observable  Inputs
(Level 2)
     Significant
Unobservable  Inputs
(Level 3)
 

Available-for-sale securities

   $ 31,631       $ 14,442       $ 17,189       $ —    

The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, the carrying value of which materially approximate their fair values.