Fair value of financial instruments

12 Months Ended

Jun. 30, 2014

We measure certain financial instruments at fair value on a recurring basis. We have established a hierarchy, which consists of three levels, for disclosure of the inputs used to determine the fair value of our financial instruments.

All of our cash equivalents and short-term investments are classified within Level 1 or Level 2. The fair values of these financial instruments were determined using the following inputs at June 30, 2014 (in thousands):



	Fair Value Measurements at June 30, 2014 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Description
Cash equivalents:
Money market mutual funds	$	622	$	622	$	—	$	—
Commercial paper	1,000		—		1,000		—
Total cash equivalents	1,622		622		1,000		—
Short-term investments:
Municipal securities	96,848		—		96,848		—
Commercial paper	999		—		999		—
Corporate bonds	24,468		—		24,468		—
Total short-term investments	122,315		—		122,315		—
Cash equivalents and short-term investments	$	123,937	$	622	$	123,315	$	—

The fair values of our financial instruments were determined using the following inputs at June 30, 2013 (in thousands):



	Fair Value Measurements at June 30, 2013 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Description
Cash equivalents:
Money market mutual funds	$	2,241	$	2,241	$	—	$	—
Total cash equivalents	2,241		2,241		—		—
Short-term investments:
Certificates of deposit	1,003		—		1,003		—
Municipal securities	148,993		—		148,993		—
Commercial paper	3,391		—		3,391		—
Corporate bonds	12,511		—		12,511		—
Total short-term investments	165,898		—		165,898		—
Cash equivalents and short-term investments	$	168,139	$	2,241	$	165,898	$	—

Accretion of premium, net of discounts, on short-term investments totaled $3.5 million and $4.4 million in fiscal 2014 and 2013, respectively.

Where applicable, we use quoted prices in active markets for identical assets to determine fair value of Level 2 short-term investments. If quoted prices in active markets for identical assets are not available to determine fair value, we use quoted prices for similar assets and liabilities or inputs that are observable either directly or indirectly. If quoted prices for identical or similar assets are not available, we use third-party valuations utilizing underlying assets assumptions.

There were no transfers between Level 1 and Level 2 financial instruments in the fiscal 2014 and 2013, respectively.

We did not have any financial liabilities measured at fair value on a recurring basis as of June 30, 2014 or 2013.

- 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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