5.	Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, we consider the most advantageous market in which it would transact and assumptions that market participants would use when pricing the asset or liability.

The Accounting Standards Codification requires certain disclosures around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

⋅	Level 1	Quoted prices (unadjusted) in active markets for identical assets or liabilities;
⋅	Level 2	Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
⋅	Level 3	Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates.

Our investment portfolio consists of money market funds, U.S. Treasury bills, repurchase agreements and domestic and international commercial paper. Our investment portfolio has an average maturity of three months or less and no investments within the portfolio have an original maturity of one year or more. All highly liquid investments with an original maturity of three months or less when purchased are considered to be cash equivalents. All cash equivalents are carried at cost less any unamortized premium or discount, which approximates fair value. All investments with original maturities of more than three months are classified as short-term investments. Our marketable securities are classified as available-for-sale and are reported at fair value with unrealized gains and losses, net of tax, reported in stockholders’ equity as a component of accumulated other comprehensive income or loss. Interest on securities is recorded in interest income. Any realized gains or losses would be shown in the accompanying consolidated statements of operations in other income or expense. We provide fair value measurements disclosures of our available-for-sale securities in accordance with one of the three levels of fair value measurement. We have no financial assets that are measured on a recurring basis that fall within Level 3 of the fair value hierarchy.

Our financial assets measured at fair value on a recurring basis as of December 31, 2017 are as follows:

	Total Fair Value		Quoted Prices in Active Markets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)

Cash	$	33,228	$	33,228	$	-	$	-
Money market funds		23,620		23,620		-		-
Commercial paper		699		-		699		-
Cash and cash equivalents		57,547		56,848		699		-

Commercial paper		7,967		-		7,967		-
Short-term investments		7,967		-		7,967		-
	$	65,514	$	56,848	$	8,666	$	-

Our financial assets measured at fair value on a recurring basis as of June 30, 2017 are as follows:

	Total Fair Value		Quoted Prices in Active Markets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)

Cash	$	5,646	$	5,646	$	-	$	-
Money market funds		26,051		26,051		-		-
Commercial paper		4,196		-		4,196		-
Cash and cash equivalents		35,893		31,697		4,196		-

Commercial paper		6,870		-		6,870		-
Short-term investments		6,870		-		6,870		-
	$	42,763	$	31,697	$	11,066	$	-

The following is a summary of available-for-sale securities as of December 31, 2017:

	Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value

Commercial paper	$	7,967	$	-	$	-	$	7,967
Total marketable securities	$	7,967	$	-	$	-	$	7,967

The following is a summary of available-for-sale securities as of June 30, 2017:

	Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value

Commercial paper	$	6,870	$	-	$	-	$	6,870
Total marketable securities	$	6,870	$	-	$	-	$	6,870