Fair Value of Assets and Liabilities

9 Months Ended

Sep. 30, 2016

Fair Value of Assets and Liabilities

Fair Value of Assets and Liabilities

(6) Fair Value of Assets and Liabilities

The Company measures fair value at 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 using assumptions that market participants would use in pricing the asset or liability (the “inputs”) into a three-tier fair value hierarchy. This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exists, requiring companies to develop their own assumptions. Observable inputs that do not meet the criteria of Level 1, and include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2. Level 3 inputs are those that reflect the Company’s estimates about the assumptions market participants would use in pricing the asset or liability, based on the best information available in the circumstances. Valuation techniques for assets and liabilities measured using Level 3 inputs may include unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable Level 3 inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain. The Company applies ASU No. 2011-04, Fair Value Measurement (Topic 820), in its fair value measurements and disclosures.

The table below presents the assets and liabilities measured and recorded in the financial statements at fair value on a recurring basis at September 30, 2016 and December 31, 2015 categorized by the level of inputs used in the valuation of each asset and liability.

			Quoted Prices
			in Active
			Markets		Significant
			for Identical		Other		Significant
			Assets or		Observable		Unobservable
			Liabilities		Inputs		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
September 30, 2016
Assets
Money market funds	$	21,647	$	21,647	$	—	$	—
Short-term investments – corporate bonds		22,591		—		22,591		—
Short-term investments – municipal bonds		7,265		—		7,265		—
Long-term investments – municipal bonds		1,408		—		1,408		—
Total Assets	$	52,911	$	21,647	$	31,264	$	—
Total Liabilities	$	—	$	—	$	—	$	—
December 31, 2015
Assets
Money market funds	$	26,056	$	26,056	$	—	$	—
Short-term investments – commercial paper		3,974		—		3,974		—
Short-term investments –  corporate bonds		24,575		—		24,575		—
Short-term investments – municipal bonds		5,025		—		5,025		—
Long-term investments – corporate bonds		21,186		—		21,186		—
Long-term investments – municipal bonds		5,811		—		5,811		—
Total Assets	$	86,627	$	26,056	$	60,571	$	—
Total Liabilities	$	—	$	—	$	—	$	—

The Level 1 assets consist of money market funds, which are actively traded daily. The Level 2 assets consist of corporate bond, commercial paper and municipal bond investments the fair value of which may not represent actual transactions of identical securities. The fair value of corporate and municipal bonds is generally determined from quoted market prices received from pricing services based upon quoted prices from active markets and/or other significant observable market transactions at fair value. The fair value of commercial paper is generally determined based on the relationship between the investment’s discount rate and the discount rates of the same issuer’s commercial paper available in the market which may not be actively traded daily. Since these fair values may not be based upon actual transactions of identical securities, they are classified as Level 2. Since all investments are classified as available-for-sale securities, any unrealized gains or losses are recorded in accumulated other comprehensive income or loss within stockholders’ equity on the balance sheet. The Company did not elect to measure any other financial assets or liabilities at fair value at September 30, 2016 or December 31, 2015.