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Fair Value of Financial Instruments
6 Months Ended
Jun. 30, 2013
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

(10) Fair Value of Financial Instruments

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be 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 assets or liabilities.

The fair value of cash and cash equivalents are classified as level 1 at June 30, 2013 and December 31, 2012. The fair value of short-term investments is determined based on quoted market prices on the balance sheet date and are classified as a Level 1 investment at December 31, 2012. There we no short-term investments at June 30, 2013.

The estimated fair value of the Common Stock warrant liability resulting from the October 2009 registered direct offering of 10,900,000 shares of Common Stock and warrants to purchase 5,450,000 shares of Common Stock and is determined by using the Black-Scholes option pricing model based on Columbia’s stock price at the measurement date, exercise price of the warrant, risk-free rate and historical volatility, and are classified as a Level 2 measurement. Columbia recorded a charge of $0.2 million for the three months ended June 30, 2013 as compared to income of $0.2 million for the three months ended June 30, 2012 as a result of the change in stock price. During the six months ended June 30, 2013 and 2012, Columbia recorded income of $0.1 million and $6.5 million, respectively, as a result of the change in the stock price.

The fair value of accounts receivable and accounts payable approximate their carrying amount.