3. FAIR VALUE MEASUREMENTS

The Company has certain financial assets that are recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

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Level 1 — quoted prices for identical instruments in active markets;

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Level 2 — quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

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Level 3 — valuations derived from valuation techniques in which one or more significant value drivers are unobservable.

The tables below present information about the Company’s financial assets that are measured and carried at fair value and indicate the level within the fair value hierarchy of valuation techniques it utilizes to determine such fair value:

	Fair Value Measurement as of March 31, 2018
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash equivalents	$	370,052	$	370,052	$	—	$	—
Commercial paper		178,875		—		178,875		—
Government and government agency bonds		270,119		270,119		—		—
Corporate bonds		92,195		92,195		—		—
Certificates of deposit		648		648		—		—
Total assets	$	911,889	$	733,014	$	178,875	$	—

	Fair Value Measurement as of December 31, 2017
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash equivalents	$	352,370	$	352,370	$	—	$	—
Commercial paper		133,368		—		133,368		—
Government and government agency bonds		294,717		284,745		9,972		—
Corporate bonds		127,956		127,956		—		—
Certificates of deposit		648		648		—		—
Total assets	$	909,059	$	765,719	$	143,340	$	—

The Company’s assets with fair value categorized as Level 1 within the fair value hierarchy include money market funds, government and government agency bonds, corporate bonds and certificates of deposit. Certain of the government and government agency bonds and corporate bonds are publically traded fixed income securities and are presented as cash equivalents on the unaudited condensed consolidated balance sheets as of March 31, 2018.

The Company’s assets with fair value categorized as Level 2 within the fair value hierarchy consist of commercial paper and government and government agency bonds. These assets have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, through income-based approaches utilizing market observable data.

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and revolving line of credit approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amounts for the term loan approximate fair value based on market activity for other debt instruments with similar characteristics and comparable risk.