Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Note 5. Fair Value Measurements

The following table provides information on those assets and liabilities measured at fair value on a recurring basis.



September 30, 2015
	Carrying
	amount in
	consolidated				Fair Value Measurement Using
	balance sheet		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents
Money Market Funds	$	1,984	$	1,984	$	1,984	$	0	$	0
Commercial Paper		271		271		271		0		0
Treasury Bills		6,141		6,141		6,141		0		0
Available-for-sale
Equities
Limited-marketable Company		0		0		0		0		0
Liabilities:
Contingent Earn-out		455		455		0		0		455



December 31, 2014
	Carrying
	amount in
	consolidated				Fair Value Measurement Using
	balance sheet		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents
Money Market Funds	$	510	$	510	$	510	$	0	$	0
Commercial Paper		345		345		345		0		0
Treasury Bills		6,542		6,542		6,542		0		0
Available-for-sale
Equities
Small Cap Technology Sector		1,256		1,256		1,256		0		0
Liabilities:
Contingent Earn-out		472		472		0		0		472

The fair value of the money market funds, commercial paper, and treasury bills is based on quoted market prices in an active market. Available-for-sale securities include equity securities, except for the limited-marketable company, that are traded in an active market. Closing stock prices are readily available from active markets and are used as being representative of fair value. The Company classifies these securities as level 1. There is an insignificant market for the limited-marketable company and the Company has determined the value based on financial and other factors, which are considered level 3 inputs in the fair value hierarchy. Management estimated the probability of meeting the revenue targets over the measurement period to determine the fair value of the contingent earn-out, which is considered a level 3 input in the fair value hierarchy.

The change in level 3 liabilities at fair value on a recurring basis is summarized as follows:

Balance at December 31, 2014	$	472
Charge to earnings		(17)
Balance at September 30, 2015	$	455

The decrease in the contingent earn-out reflects the Company’s expectation of moderately lower future contingent payments due to delays in releasing the product due to development and obtaining third-party certifications.

- 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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