Fair Value Measurements

We measure certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:

Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers.

The following table presents our financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories:



	As of June 30, 2017
	Level 1		Level 2		Level 3		Total
	(in thousands)
Description:
Assets:
Money market funds	$	10,095	$	—	$	—	$	10,095
U.S. government agencies	14,965		—		—		14,965
Commercial paper	—		4,479		—		4,479
Corporate bonds	—		15,721		—		15,721
Asset-backed securities	—		4,847		—		4,847
Total assets	$	25,060	$	25,047	$	—	$	50,107



	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
	(in thousands)
Description:
Assets:
Money market funds	$	10,085	$	—	$	—	$	10,085
U.S. government agencies	14,982		—		—		14,982
Commercial paper	—		8,078		—		8,078
Corporate bonds	—		10,314		—		10,314
Asset-backed securities	—		6,467		—		6,467
Total assets	$	25,067	$	24,859	$	—	$	49,926

We had no liabilities measured and recorded at fair value on a recurring basis as of June 30, 2017 or December 31, 2016.

Our investments, which are all classified as available-for-sale, consisted of the following:



	As of June 30, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Description:
U.S. government agencies	$	14,993	$	—	$	(28	)	$	14,965
Commercial paper	4,479		—		—			4,479
Corporate bonds	15,736		—		(15		)	15,721
Asset-backed securities	4,850		—		(3		)	4,847
Total assets	$	40,058	$	—	$	(46	)	$	40,012



	As of December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Description:
U.S. government agencies	$	14,992	$	3	$	(13	)	$	14,982
Commercial paper	7,178		—		—			7,178
Corporate bonds	10,326		1		(13		)	10,314
Asset-backed securities	6,464		4		(1		)	6,467
Total assets	$	38,960	$	8	$	(27	)	$	38,941

For all of our investments for which the amortized cost basis was greater than the fair value at June 30, 2017 and December 31, 2016, we have concluded that there is no plan to sell the security nor is it more likely than not that we would be required to sell the security before its anticipated recovery. In making the determination as to whether the unrealized loss is other-than-temporary, we considered the length of time and extent the investment has been in an unrealized loss position, the financial condition and near-term prospects of the issuers, the issuers’ credit rating and the time to maturity.