FAIR VALUE

The Company follows the authoritative guidance fair value measurement and the fair value option for financial assets and financial liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:



Level 1		Quoted prices in active markets for identical assets.
Level 2		Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

When applying fair value principles in the valuation of assets, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculates the fair value of its Level 1 and Level 2 instruments based on the exchange traded price of similar or identical instruments, where available, or based on other observable inputs. There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2016 and December 31, 2017.

The following is a list of the Company’s assets required to be measured at fair value on a recurring basis and where they were classified within the hierarchy as of December 31, 2017 (in thousands):



	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Marketable securities
Money market funds (1)	$	40,413	$	40,413	$	—	$	—
Certificates of deposit (2)	8,540		—		8,540		—
Corporate bonds and notes (2)	45,573		—		45,573		—
Treasury and agency notes and bills (2)	5,929		—		5,929		—
Commercial paper (2)	2,390		—		2,390		—
Total Assets	$	102,845	$	40,413	$	62,432	$	—

The following footnotes indicate where the noted items were recorded in the Consolidated Balance Sheet at December 31, 2017:


(1)	Reported as cash and cash equivalents.


(2)	Reported as short-term investments.

The following is a list of the Company’s assets required to be measured at fair value on a recurring basis and where they were classified within the hierarchy as of December 31, 2016 (in thousands):



	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Marketable securities
Money market funds (1)	$	14,146	$	14,146	$	—	$	—
Corporate bonds and notes (2)	36,502		—		36,502		—
Treasury and agency notes and bills (2)	5,972		—		5,972		—
Commercial paper (2)	5,216		—		5,216		—
Total Assets	$	61,836	$	14,146	$	47,690	$	—

The following footnotes indicate where the noted items were recorded in the Consolidated Balance Sheet at December 31, 2016:


(1)	Reported as cash and cash equivalents.


(2)	Reported as short-term investments.

The Company also has outstanding debt at December 31, 2017 and 2016 that is considered a level 2 liability and is measured at fair value on a recurring basis. See Note 10 " Debt" for additional information. At December 31, 2017 and 2016, the fair value of the Company's debt is not materially different than the outstanding principal amount.

Non-Recurring Fair Value Measurements

The following table represents the activity in level 3 assets (in thousands):



	Assets held for sale		Assets included in discontinued operations and held for sale		Other
Balance at December 31, 2015	$	—	$	—	$	4,280
Assets transferred	—		—		—
Assets sold	—		—		—
Assets received	—		—		—
Balance at December 31, 2016	$	—	$	—	$	4,280	(1	)
Assets transferred	—		—		—
Assets sold	—		—		—
Assets received	—		—		1,664		(2	)
Balance at December 31, 2017	$	—	$	—	$	5,944	(3	)

(1) This amount represents the value of the patents that were received as part of licensing settlements with customers. These assets were valued using a methodology based on an arms-length purchase price of bulk patent assets, with adjustments based on limited pick rights, the total available market, and remaining average patent life.

(2) This amount represents the value of patents received as part of a licensing settlement with a customer. These assets were valued using a cost methodology based on prior arms-length patent purchases by both the company and other third party acquirers.

(3) The accumulated amortization associated with the patents was $2.3 million and $1.6 million as of December 31, 2017 and 2016, respectively.