XML 26 R14.htm IDEA: XBRL DOCUMENT

Fair Value Measurements

9 Months Ended

Oct. 31, 2021

The carrying amounts of accounts receivable and other current assets, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature.

Financial assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires management to make judgments and considers factors specific to the asset or liability.

The following table presents the fair value hierarchy for financial assets measured at fair value on a recurring basis as of October 31, 2021 (in thousands):


	Level 1		Level 2		Total
Assets
Cash equivalents:
Money market funds	$	477,352	$	—	$	477,352
U.S. treasury securities	—		20,499		20,499

Corporate notes and bonds	—		5,855		5,855
Short-term investments:
Certificates of deposits	—		16,760		16,760
Asset-backed securities	—		190,252		190,252
Commercial paper	—		47,383		47,383
Corporate notes and bonds	—		641,577		641,577
Foreign government bonds	—		26,591		26,591
U.S. agency obligations	—		27,938		27,938
U.S. treasury securities	—		251,040		251,040
Foreign currency derivative contracts	—		72		72
Total financial assets	$	477,352	$	1,227,967	$	1,705,319
Liabilities
Foreign currency derivative contracts	$	—	$	34	$	34
Total financial liabilities	$	—	$	34	$	34

The following table presents the fair value hierarchy for financial assets measured at fair value on a recurring basis as of January 31, 2021 (in thousands):


	Level 1		Level 2		Total
Assets
Cash equivalents:
Money market funds	$	259,937	$	—	$	259,937
U.S. treasury securities	—		15,520		15,520
Short-term investments:
Certificates of deposits	—		17,364		17,364
Asset-backed securities	—		126,576		126,576
Commercial paper	—		57,396		57,396
Corporate notes and bonds	—		431,047		431,047
Foreign government bonds	—		31,898		31,898
U.S. agency obligations	—		52,875		52,875
U.S. treasury securities	—		215,966		215,966
Foreign currency derivative contracts	—		440		440
Total	$	259,937	$	949,082	$	1,209,019
Liabilities
Foreign currency derivative contracts	$	—	$	72	$	72
Total	$	—	$	72	$	72

We determine the fair value of our security holdings based on pricing from our service providers and market prices from industry-standard independent data providers. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs).

Balance Sheet Hedges

We enter into foreign currency forward contracts in order to hedge our foreign currency exposure. We account for derivative instruments at fair value with changes in the fair value recorded as a component of other income, net in our condensed consolidated statements of comprehensive income. Cash flows from such forward contracts are classified as operating activities. Foreign currency gains or losses for the three and nine months ended October 31, 2021 and 2020 were not material for any of the periods.

The fair value of our outstanding derivative instruments is summarized below (in thousands):


	October 31, 2021		January 31, 2021
Notional amount of foreign currency derivative contracts	$	10,142	$	52,516
Fair value of foreign currency derivative contracts	10,104		52,148

Details on outstanding balance sheet hedges are presented below as of the date shown below (in thousands):


Derivatives not designated as hedging instruments	Balance sheet location	October 31, 2021		January 31, 2021
Derivative Assets
Foreign currency derivative contracts	Prepaid expenses and other current assets	$	72	$	440
Derivative Liabilities
Foreign currency derivative contracts	Accrued expenses	$	34	$	72

- 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.

+ References + Details