FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2014

NOTE 4 FAIR VALUE MEASUREMENT

The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value of marketable securities is based on quoted market prices in active markets (level 1). Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

As of December 31, 2014, the Company held government and corporate debt securities with an aggregated cost of $33,228 thousand and an aggregated fair value of $32,895 thousand. The gross unrealized gains and losses as of December 31, 2014 were $68 thousand and $249 thousand, respectively. The aggregate fair value of investments with unrealized losses as of December 31, 2014 was $19,529 thousand.

During the year ended December 31, 2014, the Company recognized other-than-temporary impairment of $152 thousand related to debt securities.

As of December 31, 2013, the Company held debt securities and equity securities. The cost, aggregate fair value and unrealized holding gains and losses by major security types were as follows:

	As of December 31, 2013
	Cost		Aggregate fair value		Unrealized gains, net
	U.S. dollars in thousands
Government and corporate debentures		45,518		46,114		596
Other (equity securities)		588		604		16
		46,106		46,718		612

During the years ended December 31, 2013 and 2012 no other-than-temporary impairments were recognized by the Company.

Contractual maturities of investments in available-for-sale debt securities were as follows:

	Fair Value as of December 31, 2014
Due in 1 year		7,732
Due in 2 years		8,011
Due in 3 years		5,726
Due in 4 years		6,112
Due in 5 years		3,773
Due after 5 years		1,541
		32,895

Short-term deposits included in cash and cash equivalents were $192,456 thousand and $31,935 thousand, as of December 31, 2014 and 2013, respectively.

The carrying amount of financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, approximate fair value because of their generally short maturities.

- 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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