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Fair Value Measurement

12 Months Ended

Jan. 31, 2020

Our financial assets and liabilities consist principally of cash and cash equivalents, marketable securities, restricted cash, accounts receivable, and accounts payable. We measure and record certain financial assets and liabilities at fair value on a recurring basis. The estimated fair value of accounts receivable and accounts payable approximates their carrying value due to their short-term nature. Cash equivalents, marketable securities and restricted cash are recorded at estimated fair value.

All of our cash equivalents and marketable securities are classified within Level 1 or Level 2 because the cash equivalents and marketable securities are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs.

We follow a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Assets Measured at Fair Value on a recurring Basis

The following table represents our financial assets according to the fair value hierarchy, measured at fair value as of January 31, 2020 (in thousands):


	Level 1		Level 2		Total
Cash equivalents:
Money market funds	$	34,596	$	—	$	34,596






Marketable securities:

Asset-backed securities	—		68,429		68,429
Corporate notes and obligations	—		200,117		200,117
Commercial paper	—		46,467		46,467
Municipal securities	—		20,930		20,930
Certificates of deposit	—		15,015		15,015
U.S. treasury securities	—		24,596		24,596
Total financial assets	$	34,596	$	375,554	$	410,150

The following table represents our financial assets according to the fair value hierarchy, measured at fair value as of January 31, 2019 (in thousands):



	Level 1		Level 2		Total
Cash equivalents:
Money market funds	$	29,966	$	—	$	29,966



Commercial paper	—		9,158		9,158
Reverse repurchase agreements	—		5,000		5,000
Certificates of deposits	—		4,000		4,000

Marketable securities:

Asset-backed securities	—		63,585		63,585
Corporate notes and obligations	—		140,735		140,735
Commercial paper	—		101,720		101,720

Certificates of deposit	—		46,571		46,571
U.S. treasury securities	14,950		6,985		21,935
Foreign government obligations	—		4,000		4,000


Total financial assets	$	44,916	$	381,754	$	426,670

We value our Level 1 assets using quoted prices in active markets for identical instruments. We value our Level 2 assets with the help of a third-party pricing service using quoted market prices for similar instruments, nonbinding market prices that are corroborated by observable market data, or pricing models such as discounted cash flow techniques. We use such pricing data as the primary input, to which we have not made any material adjustments during the periods presented, to make our determination and assessments as to the ultimate valuation of these assets.

We have no Level 1, 2 or 3 liabilities and no Level 3 assets. There were no transfers between Level 1 and Level 2 assets for the years ended January 31, 2020 and 2019.

Assets Measured at Fair Value on a Nonrecurring Basis

Certain of our assets, including intangible assets and goodwill, are measured at fair value on a nonrecurring basis, when they are deemed to be other-than temporarily impaired. There were no impairment charges recognized during the years ended January 31, 2020, 2019 and 2018.

- 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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