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Fair Value Measurements

12 Months Ended

Jan. 31, 2020

The following table presents the fair value hierarchy for financial assets measured at fair value on a recurring basis as of January 31, 2020 (in thousands):



	Level 1		Level 2		Total
Assets
Cash equivalents:
Money market funds	$	24,107	$	—	$	24,107
Commercial paper	—		1,616		1,616
Corporate notes and bonds	—		2,245		2,245
Short-term investments:
Certificates of deposits	—		3,503		3,503
Asset-backed securities	—		100,815		100,815
Commercial paper	—		19,969		19,969
Corporate notes and bonds	—		236,214		236,214
Foreign government bonds	—		3,407		3,407
U.S. treasury securities	—		246,107		246,107
Foreign currency derivative contracts	—		75		75
Total	$	24,107	$	613,951	$	638,058
Liabilities
Foreign currency derivative contracts	—		42		42
Total	$	—	$	42	$	42

The following table presents the fair value hierarchy for financial assets measured at fair value on a recurring basis as of January 31, 2019 (in thousands):



	Level 1		Level 2		Total
Assets
Cash equivalents:
Money market funds	$	39,168	$	—	$	39,168
Corporate notes and bonds	—		1,034		1,034
U.S. treasury securities	—		41,505		41,505
Short-term investments:
Certificates of deposits	—		6,010		6,010
Asset-backed securities	—		78,395		78,395
Commercial paper	—		9,117		9,117
Corporate notes and bonds	—		185,130		185,130
Foreign government bonds	—		1,491		1,491
U.S. agency obligations	—		15,912		15,912
U.S. treasury securities	—		243,135		243,135
Total	$	39,168	$	581,729	$	620,897
Liabilities
Foreign currency derivative contracts	—		88		88
Total	$	—	$	88	$	88

We determine the fair value of our security holdings based on pricing from our service providers and market prices from industry-standard independent data providers. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs).

The carrying amounts of accounts receivable and other current assets, accounts payable and accrued liabilities approximate their fair value due to their short-term nature.

Balance Sheet Hedges

We enter into foreign currency forward contracts (the “Forward Contracts”) in order to hedge our foreign currency exposure. We account for derivative instruments at fair value with changes in the fair value recorded as a component of other income, net in our consolidated statements of comprehensive income. Cash flows from such forward contracts are classified as operating activities. During the fiscal years ended January 31, 2020 and 2019, we recognized realized foreign currency losses on hedging of $0.3 million and foreign currency gains of $0.3 million, respectively.

The fair value of our outstanding derivative instruments is summarized below (in thousands):



	January 31,
	2020		2019
Notional amount of foreign currency derivative contracts	$	7,304	$	(5,112	)
Fair value of foreign currency derivative contracts	7,271		(5,024		)

Details on outstanding balance sheet hedges are presented below as of the date shown below (in thousands):



		January 31,
		2020		2019
Derivative Assets	Balance Sheet Location
Derivatives not designated as hedging instruments:
Foreign currency derivative contracts	Prepaid expenses and other current assets	$	75	$	—
Derivative Liabilities
Derivatives not designated as hedging instruments:
Foreign currency derivative contracts	Accrued expenses	$	42	$	88

- 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.

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