13. Fair Value

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and 2015 (U.S. dollars in thousands):

	Fair Value at December 31, 2014
	Level 1		Level 2		Level 3		Total

Financial assets (liabilities):
Cash equivalents and current investments	$	86,574	$	─	$	─	$	86,574
Forward contracts	─			1,661	─			1,661
Life insurance contracts	─		─			26,280		26,280
Total	$	86,574	$	1,661	$	26,280	$	114,515

	Fair Value at December 31, 2015
	Level 1		Level 2		Level 3		Total

Financial assets (liabilities):
Cash equivalents and current investments	$	47,121	$	─	$	─	$	47,121
Forward contracts	─			485	─			485
Life insurance contracts	─		─			27,292		27,292
Total	$	47,121	$	485	$	27,292	$	74,898

NU SKIN ENTERPRISES, INC.

Notes to Consolidated Financial Statements

The following methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair value in the consolidated balance sheets:

Cash equivalents and current investments: Cash equivalents and current investments primarily consist of highly rated money market funds with maturities of three months or less, and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, the Company considers all cash equivalents and current investments as Level 1. Current investments include $11.8 million and $14.4 million as of December 31, 2014 and 2015, respectively, that is restricted for the Company's voluntary participation in a consumer protection cooperative in South Korea.

Forward contracts: To hedge foreign currency risks, the Company uses foreign currency exchange forward contracts, where possible and practical. These forward contracts are valued using standard valuation formulas with assumptions about foreign currency exchange rates derived from existing exchange rates as discussed in Note 17 "Derivative Financial Instruments".

Life insurance contracts: ASC 820 preserves practicability exceptions to fair value measurements provided by other applicable GAAP. The guidance in ASC 715-30-35-60 allows a reporting entity, as a practical expedient, to use cash surrender value or conversion value as an expedient for fair value when it is present. Accordingly, the Company determines the fair value of its life insurance contracts as the cash-surrender value of life insurance policies held in its Rabbi Trust as disclosed in Note 16 "Executive Deferred Compensation Plan".

The following table provides a summary of changes in fair value of the Company's Level 3 marketable securities (U.S. dollars in thousands):

Life Insurance Contracts	2014			2015

Beginning balance at January 1	$	23,172		$	26,280
Actual return on plan assets:
Relating to assets still held at the reporting date		1,249			(1,597	)
Purchases and issuances		2,798			3,025
Sales and settlements		(939	)		(416	)
Transfers into Level 3	─			─
Ending balance at December 31	$	26,280		$	27,292