3. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value

ASC Topic 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include the following:


•	Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;


•	Level 2, defined as inputs that are observable either directly or indirectly such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and other inputs that can be corroborated by observable market data; and


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

The Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of September 29, 2018 and March 31, 2018 was as follows (in thousands):



September 29, 2018	Level 1		Level 2			Level 3		Total
Cash equivalents:
Money market securities	$	29,871	$	—		$	—	$	29,871
Commercial paper	—		6,495			—		6,495
Total cash equivalents	$	29,871	$	6,495		$	—	$	36,366
Short term investments - available for sale:
U.S. treasury fund	$	26,793	$	—		$	—	$	26,793
Commercial paper	—		48,904			—		48,904
Corporate bonds	—		36,307			—		36,307
Total short-term investments - available for sale	$	26,793	$	85,211		$	—	$	112,004
Forward purchase or sale contracts:
Japanese Yen	$	—	$	(31	)	$	—	$	(31	)
New Taiwan Dollar	—		(18		)	—		(18		)
Korean Won	—		(24		)	—		(24		)
Euro	—		(5		)	—		(5		)
British Pound	—		(10		)	—		(10		)
Chinese Renminbi	—		12			—		12
Singapore Dollar	—		(1		)	—		(1		)
Total forward contracts	$	—	$	(77	)	$	—	$	(77	)
Deferred compensation plan assets:*
Mutual funds and exchange traded funds	$	2,234	$	—		$	—	$	2,234
Money market securities	208		—			—		208
Total deferred compensation plan assets	$	2,442	$	—		$	—	$	2,442



March 31, 2018	Level 1		Level 2			Level 3		Total
Cash equivalents:
Money market securities	$	41,752	$	—		$	—	$	41,752
U.S. treasury fund	2,500		—			—		2,500
Commercial paper	—		3,498			—		3,498
Corporate bonds	—		1,999			—		1,999
Total cash equivalents	$	44,252	$	5,497		$	—	$	49,749
Short term investments - available for sale:
U.S. treasury fund	$	10,458	$	—		$	—	$	10,458
Commercial paper	—		25,913			—		25,913
Corporate bonds	—		10,750			—		10,750
Total short-term investments - available for sale	$	10,458	$	36,663		$	—	$	47,121
Forward purchase or sale contracts:
Japanese Yen	$	—	$	(23	)	$	—	$	(23	)
New Taiwan Dollar	—		3			—		3
Korean Won	—		(12		)	—		(12		)
Euro	—		7			—		7
British Pound	—		49			—		49
Chinese Renminbi	—		(29		)	—		(29		)
Singapore Dollar	—		(1		)	—		(1		)
Total forward contracts	$	—	$	(6	)	$	—	$	(6	)
Deferred compensation plan assets:*
Mutual funds and exchange traded funds	$	1,841	$	—		$	—	$	1,841
Money market securities	207		—			—		207
Total deferred compensation plan assets	$	2,048	$	—		$	—	$	2,048

*These investments represent assets held in trust for the deferred compensation plan

For Level 1 assets, the Company utilized quoted prices in active markets for identical assets.

For Level 2 assets, exclusive of forward contracts, the Company utilized quoted prices in active markets for similar assets. For forward contracts, spot prices at September 29, 2018 and March 31, 2018 were utilized to calculate fair values.

During the first two quarters of fiscal 2019 and 2018, there were no transfers between Level 1, 2 or 3 assets.

Investments

The Company’s investments, including investments classified as cash equivalents, at September 29, 2018 and March 31, 2018 were as follows (in thousands):



			Unrealized
September 29, 2018	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
U.S. treasury fund	$	26,800	$	—	$	(7	)	$	26,793
Commercial paper	55,399		—		—			55,399
Corporate Bonds	36,322		—		(15		)	36,307
Total investments (current)	$	118,521	$	—	$	(22	)	$	118,499
Available-for-sale securities (non-current):
Mutual funds, exchange traded funds and money market securities*	$	2,150	$	292	$	—		$	2,442
Total investments (non-current)	$	2,150	$	292	$	—		$	2,442
			Unrealized
March 31, 2018	Cost		Gain		Loss			Fair Value
Available-for-sale securities (current):
U.S. treasury fund	$	12,975	$	—	$	(17	)	$	12,958
Commercial paper	29,411		—		—			29,411
Corporate bonds	12,768		—		(19		)	12,749
Total investments (current)	$	55,154	$	—	$	(36	)	$	55,118
Available-for-sale securities (non-current):
Mutual funds, exchange traded funds and money market securities*	$	1,881	$	167	$	—		$	2,048
Total investments (non-current)	$	1,881	$	167	$	—		$	2,048

*These investments represent assets held in trust for the deferred compensation plan

For purposes of determining gross realized gains and losses and reclassification out of accumulated other comprehensive income (loss), the cost of securities sold is based on specific identification. Net unrealized holding gains and losses on current available-for-sale securities included in accumulated other comprehensive income (loss) were insignificant as of September 29, 2018 and March 31, 2018.