Note 2. Available-for-sale Securities and Fair Value on Financial Instruments

Available-for-sale Securities

The following is a summary of available-for-sale securities at March 31, 2017 (in thousands):

	March 31, 2017
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
Money market funds	$	1,106	$	—	$	—		$	1,106
United States government agency securities		18,106		—		(18	)		18,088
Corporate debt securities		21,040		—		(10	)		21,030
Marketable equity securities		—		3,710		—			3,710
Total available-for-sale securities	$	40,252	$	3,710	$	(28	)	$	43,934

The following is a summary of available-for-sale securities at December 31, 2016 (in thousands):

	December 31, 2016
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
Money market funds	$	8,991	$	—	$	—		$	8,991
United States government agency securities		8,030		—		(1	)		8,029
Corporate debt securities		37,110		—		(23	)		37,087
Marketable equity securities		—		3,952		—			3,952
Total available-for-sale securities	$	54,131	$	3,952	$	(24	)	$	58,059

Available-for-sale securities at March 31, 2017 and December 31, 2016, consisted of the following by contractual maturity (in thousands):

	March 31, 2017				December 31, 2016
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	40,252	$	40,224	$	54,131	$	54,107
Marketable equity securities		—		3,710		—		3,952
Greater than one year and less than five years		—		—		—		—
Total available-for-sale securities	$	40,252	$	43,934	$	54,131	$	58,059

The following tables show all available-for-sale marketable securities in an unrealized loss position for which an other-than-temporary impairment has not been recognized and the related gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	March 31, 2017
	Less than 12 Months					12 Months or Greater				Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
United States government agency securities	$	18,088	$	(18	)	$	—	$	—	$	18,088	$	(18	)
Corporate debt securities		18,030		(10	)		—		—		18,030		(10	)
Total available-for-sale securities	$	36,118	$	(28	)	$	—	$	—	$	36,118	$	(28	)

	December 31, 2016
	Less than 12 Months					12 Months or Greater				Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
United States government agency securities	$	6,035	$	(1	)	$	—	$	—	$	6,035	$	(1	)
Corporate debt securities		34,086		(23	)		—		—		34,086		(23	)
Total available-for-sale securities	$	40,121	$	(24	)	$	—	$	—	$	40,121	$	(24	)

As of March 31, 2017, the Company considered the declines in market value of its marketable securities investment portfolio to be temporary in nature and did not consider any of its investments other-than-temporarily impaired. The Company typically invests in highly-rated securities, and its investment policy limits the amount of credit exposure to any one issuer. The policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. During the three months ended March 31, 2017 and 2016, the Company did not recognize any other-than-temporary impairment loss. The Company has no current requirement or intent to sell the securities in an unrealized loss position. The Company expects to recover up to (or beyond) the initial cost of investment for securities held.

The Company recognized $0.02 million of realized gains from the sale of available-for-sale investments during the three months ended March 31, 2017. The Company did not record any gross realized losses from the sale or maturity of available-for-sale investments during the three months ended March 31, 2017 and 2016.

Fair Value Disclosures

The Company uses certain assumptions that market participants would use to determine the fair value of an asset or liability in pricing the asset or liability in an orderly transaction between market participants at the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows:

•	Level 1: Quoted prices in active markets for identical instruments

•	Level 2: Other significant observable inputs (including quoted prices in active markets for similar instruments)

•	Level 3: Significant unobservable inputs (including assumptions in determining the fair value of certain investments)

Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

To estimate the fair value of Level 2 debt securities as of March 31, 2017, the Company’s primary service relies on inputs from multiple industry-recognized pricing sources to determine the price for each investment. Corporate debt and U.S. government agency securities are systematically priced by this service as of the close of business each business day. If the primary pricing service does not price a specific asset a secondary pricing service is utilized.

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at March 31, 2017 (in thousands):

	Balance sheet			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	classification	Total		(Level 1)		(Level 2)		(Level 3)
Money market funds	Cash and cash equivalents	$	1,106	$	1,106	$	—	$	—
United States government agency securities	Short-term investments		18,088		—		18,088		—
Corporate debt securities	Short-term investments		21,030		—		21,030		—
Marketable equity securities	Marketable equity securities		3,710		3,710		—		—
Total financial assets		$	43,934	$	4,816	$	39,118	$	—

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2016 (in thousands):

	Balance sheet			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	classification	Total		(Level 1)		(Level 2)		(Level 3)
Money market funds	Cash and cash equivalents	$	8,991	$	8,991	$	—	$	—
United States government agency securities	Short-term investments		8,029		—		8,029		—
Corporate debt securities	Short-term investments		37,087		—		37,087		—
Marketable equity securities	Marketable equity securities		3,952		3,952		-		—
Total financial assets		$	58,059	$	12,943	$	45,116	$	—

The Company did not have any transfers among fair value measurement levels during the three months ended March 31, 2017.