Fair Value of Financial Assets and Liabilities

12 Months Ended

Dec. 31, 2016

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

The following tables present information about the fair value measurements of the Company’s financial assets and liabilities which are measured at fair value on a recurring basis, and indicate the level of the fair value hierarchy utilized to determine such fair values:


	December 31, 2016
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	11,522	$	12,691	$	—	$	24,213
Marketable securities		—		143,963		—		143,963
Total	$	11,522	$	156,654	$	—	$	168,176


	December 31, 2015
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	8,810	$	250	$	—	$	9,060
Marketable securities		—		82,187		—		82,187
Total	$	8,810	$	82,437	$	—	$	91,247

As of December 31, 2016 and 2015, the Company’s cash equivalents consisted of investments with maturities of less than three months and included a money market fund which was valued based upon Level 1 inputs, and commercial paper and corporate debt securities which were valued based upon Level 2 inputs. In determining the fair value of its Level 2 investments the Company relied on quoted prices for identical securities in markets that are not active. These quoted prices were obtained by the Company with the assistance of a third‑party pricing service based on available trade, bid and other observable market data for identical securities. Quarterly, the Company compares the quoted prices obtained from the third‑party pricing service to other available independent pricing information to validate the reasonableness of the quoted prices provided. The Company evaluates whether adjustments to third-party pricing is necessary and, historically, the Company has not made adjustments to quoted prices obtained from the third-party pricing service third‑party pricing are necessary. During the years ended December 31, 2016 and 2015, there were no transfers between Level 1, Level 2 and Level 3.

As of December 31, 2016 and 2015, the fair value of the Company’s available-for-sale marketable securities by type of security was as follows:


	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gain		Loss		Value

Marketable securities:
Corporate debt securities	$	51,352	$	—	$	(59)	$	51,293
Commercial paper		20,463		—		—		20,463
Asset-backed securities		28,692		6		(1)		28,697
U.S. government agency debt securities		43,505		8		(3)		43,510
Total marketable securities	$	144,012	$	14	$	(63)	$	143,963


	December 31, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gain		Loss		Value
Marketable securities:
Corporate debt securities	$	46,270	$	—	$	(125)	$	46,145
Commercial paper		9,789		—		—		9,789
Asset-backed securities		6,234		—		(14)		6,220
U.S. government agency debt securities		20,048		—		(15)		20,033
Total marketable securities	$	82,341	$	—	$	(154)	$	82,187

- 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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