Fair Value Measurements

3 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

6. FAIR VALUE MEASUREMENTS

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. This standard also establishes a hierarchy for inputs used in measuring fair value. This standard maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available in the circumstances. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The hierarchy is broken down into the following three levels:

• Level 1 — Inputs are quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs include 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 inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.

• Level 3 — Inputs are unobservable for the asset or liability and their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 also may include certain investment securities for which there is limited market activity or a decrease in the observability of market pricing for the investments, such that the determination of fair value requires significant judgment or estimation.

Fair value is applied to financial assets such as our marketable securities, which are classified and accounted for as available-for-sale. These items are stated at fair value at each reporting period using the above guidance. The following tables provide information by level for financial assets that are measured at fair value on a recurring basis (in thousands):

			Fair Value Measurements at December 31, 2011 using:
	Total carrying		Quoted price in		Significant other		Significant
	value at		active markets		observable inputs		unobservable inputs
	December 31, 2011		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market	$	15,300	$	15,300	$	—	$	—
Available-for-sale marketable securities:
Corporate bonds		33,380		—		33,380		—
Commercial paper		2,997		—		2,997		—
Certificates of deposit		9,007		—		9,007		—
Government municipal bonds		18,257		—		18,257		—
Total cash equivalents and marketable securities measured at fair value	$	78,941	$	15,300	$	63,641	$	—

			Fair Value Measurements at September 30, 2011 using:
	Total carrying		Quoted price in		Significant other		Significant
	value at		active markets		observable inputs		unobservable inputs
	September 30, 2011		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market	$	30,474	$	30,474	$	—	$	—
Available-for-sale marketable securities:
Corporate bonds		24,171		—		24,171		—
Commercial paper		4,995		—		4,995		—
Certificates of deposit		8,766				8,766
Government municipal bonds		15,195		—		15,195		—
Total cash equivalents and marketable securities measured at fair value	$	83,601	$	30,474	$	53,127	$	—

Cash equivalents are measured at fair value using quoted market prices in active markets for identical assets. We value our Level 2 assets using inputs that are based on market indices of similar assets within an active market. There were no transfers in to or out of our Level 2 financial assets during the three months ended December 31, 2011.

We had no financial assets valued with Level 3 inputs as of December 31, 2011 nor did we purchase or sell any Level 3 financial assets during the three months ended December 31, 2011.

The use of different assumptions, applying different judgment to matters that are inherently subjective and changes in future market conditions could result in different estimates of fair value of our securities, currently and in the future. If market conditions deteriorate, we may incur impairment charges for securities in our investment portfolio.