Fair Value Measurements

9 Months Ended

Jun. 30, 2013

Fair Value Measurements

Fair Value Measurements

9. Fair Value Measurements

The Company records its financial assets and liabilities at fair value in accordance with the framework for measuring fair value in authoritative guidance. The framework establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). The three levels are defined as follows.

· Level 1 — inputs are unadjusted quoted prices for identical assets or liabilities in active markets.

· Level 2 — inputs include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3 — inputs are unobservable and considered significant to the fair value measurement.

The carrying amounts of financial instruments not included in the table below, including those cash and cash equivalents that are not invested in money market funds, restricted cash, accounts receivable, accounts payable and other accrued expenses, approximate fair value because of the short maturity of those instruments. The Company believes that the carrying values approximate fair values of note payable — related party because stated interest rates approximate market rates. As of June 30, 2013, the entire balance of the note payable — related party had been paid.

As of June 30, 2013 and September 30, 2012, the Company had the following financial assets that were subject to fair value measurements according to the fair value hierarchy:

		As ofJune 30, 2013			As ofSeptember 30, 2012
	Input Level	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Cash and cash equivalents:
Money market fund	1	$	270,536	270,536	245,741	245,741
Investments — available-for-sale securities:
Certificates of deposit	2	$	1,076,524	1,076,524	978,515	978,515
Corporate bonds	2	276,862		276,862	484,715	484,715
Municipal bonds	2	382,618		382,618	287,944	287,944
Total		$	1,736,004	1,736,004	1,751,174	1,751,174

The money market fund and available-for-sale securities are carried at fair value. For debt securities for which quoted market prices are not available, the fair value is determined using an income approach valuation technique that considers, among other things, rates currently observed in publicly traded debt markets for debt of similar terms to companies with comparable credit risk. During the three and nine months ended June 30, 2013, the Company purchased $95,000 and $521,000, respectively, in available-for-sale securities, resulting in a decrease in the money market fund (level 1) and an increase in available-for-sale securities (level 2).  During the three and nine months ended June 30, 2013, available-for-sale securities of $95,000 and $435,000, respectively, matured, and available-for-sale securities of $90,000 were sold, resulting in an increase in the money market fund (level 1) and a decrease in available-for-securities (level 2). Transfers between levels of the fair value hierarchy are deemed to have occurred when amounts from the money market fund are invested in available-for-sale securities and vice versa.  The transfer is deemed to have occurred as of the date of the event or transfer.  During the nine months ended June 30, 2013 and 2012, there were no transfers between levels and the Company had no level 3 assets.  See Note 8, Investments, for additional disclosures.