Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2017

3. Fair Value of Financial Instruments

As of December 31, 2017 and 2016, we had invested our financial assets in marketable securities and a money market fund that can be converted to cash at par on demand. We measured these funds, which totaled $87.9 million and $31.6 million as of December 31, 2017 and 2016, respectively, at fair value, which approximates cost and classified them as Level 1 and Level 2 assets in the fair value hierarchy.

Our available-for-sale securities included:

	Fair Value	Estimated Fair Value
	Hierarchy	December 31,		December 31,
	Level	2017		2016
		(in thousands)
Corporate bonds	Level 2	$	26,116	$	—
Commercial paper	Level 2		32,637		—
U.S. treasury securities	Level 1		14,210		—
Money market funds	Level 1		14,979		31,605
Total Marketable securities		$	87,942	$	31,605

Classified as:
Cash equivalents		$	14,979	$	31,605
Short-term marketable securities			57,682		—
Long-term marketable securities			15,281		—
Total marketable securities		$	87,942	$	31,605

The estimated fair value of marketable securities is based on quoted market prices for these or similar investments obtained from a commercial pricing service. The fair value of marketable securities classified within Level 2 is based upon inputs that may include benchmark yields, reported trades, broker/dealer quotes and issuer spreads. Our accumulated other comprehensive loss on our balance sheets consisted of net unrealized losses on available-for-sale investments of $75,000 and zero at December 31, 2017 and 2016, respectively. We did not recognize any realized gains or losses on sales of investments for any period presented.

As of December 31 2017, all our marketable securities had original maturities of less than two years. The weighted-average maturity of our holdings was seven months. None of our marketable securities changed from one fair value hierarchy to another during the year ended December 31, 2017.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details