FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2013

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

7. FAIR VALUE MEASUREMENTS

The Company has certain financial assets recorded at fair value which have been classified as either Level 1 or 2 within the fair value hierarchy as described in the accounting standards for fair value measurements. Fair value is the price that would be received from the sale of an asset or the price paid to transfer a liability in an orderly transaction between independent market participants at the measurement date.  Fair values determined by Level 1 inputs utilize observable data such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points in which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy level is determined by the lowest level of significant input.  At March 31, 2013 and December 31, 2012, the Company did not own any Level 3 financial assets.

The Company’s financial assets classified as Level 2 have been initially valued at the transaction price and subsequently valued typically utilizing third party pricing services. Because the Company’s investment portfolio may include securities that do not always trade on a daily basis, the pricing services use many observable market inputs to determine value including reportable trades, benchmark yields and benchmarking of like securities. The Company validates the prices provided by the third party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources. After completing the validation procedures, the Company did not adjust or override any fair value measurements provided by these pricing services as of March 31, 2013 or December 31, 2012.

The tables below present information about the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012 and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value.

	Fair value measurements at reporting date using
	Quoted prices in						Significant
	active markets for			Significant other			unobservable
	identical assets			observable inputs			inputs			Balance as of
Description	(Level 1)			(Level 2)			(Level 3)			March 31, 2013
Cash equivalents:
Money Market funds	$	17,649		$	—		$	—		$	17,649
Short-term investments:
Government securities	—			17,197			—			17,197
Total	$	17,649		$	17,197		$	—		$	34,846
	Fair value measurements at reporting date using
	Quoted prices in active						Significant
	markets for identical			Significant other			unobservable
	assets			observable inputs			inputs			Balance as of
Description	(Level 1)			(Level 2)			(Level 3)			December 31, 2012
Cash equivalents:
Money market funds	$		11,157	$		—	$		—	$		11,157
Government securities	—			2,015			—			2,015
Short-term investments:
Government securities	—			29,201			—			29,201
Long-term investments:
Government securities	—			2,508			—			2,508
Total	$		11,157	$		33,724	$		—	$		44,881

The Company considers all highly liquid investments purchased with an original maturity date of ninety days or less at the date of purchase to be cash equivalents, and investments purchased with an original maturity date of ninety days or more at the date of purchase and a maturity date of one year or less at the balance sheet date to be short-term investments.  All other investments are classified as long-term.