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Fair Value Measurements
3 Months Ended
Mar. 31, 2014
Fair Value Measurements

6. 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 as of March 31, 2014 and December 31, 2013 consist of available-for-sale marketable securities. 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. The Company did not transfer any assets between Level 2 and Level 1 during the three months ended March 31, 2014.

 

As of March 31, 2014, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows:

 

     Fair Value Measurement as of March 31, 2014 Using  
(in thousands)    March 31,
2014
     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

   $ 57,142       $ 31,546       $ 25,596       $ —     

As of December 31, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows:

 

     Fair Value Measurement as of December 31, 2013 Using  
(in thousands)    December 31,
2013
     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

   $ 65,586       $ 31,566       $ 34,020       $ —     

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.