Fair Value Measurements

The fair-value hierarchy established in ASC 820 prioritizes the inputs used in valuation techniques into three levels as follows:



	Level-1 – Observable inputs – quoted prices in active markets for identical assets and liabilities
	Level-2 – Observable inputs other than the quoted prices in active markets for identical assets and liabilities – such as quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, or other inputs that are observable or can be corroborated by observable market data;
	Level-3 – Unobservable inputs – includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013, and the basis for that measurement, by level within the fair value hierarchy:



(In thousands)	Balance as of June 30, 2014			Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Financial assets
Certificates of deposit	$	1,663		$	—	$	1,663		$	—
Short-term bond mutual funds	24,034			24,034		—			—
Foreign exchange forward contracts	10					10
Deferred compensation plan assets (1)	910			910		—			—
Total	$	26,617		$	24,944	$	1,673		$	—
Financial liabilities
Foreign exchange forward contracts	$	(282	)	$	—	$	(282	)	$	—

(1) Recorded as an Other asset with an offsetting liability for the obligation to its employees in Other liabilities.



(In thousands)	Balance as of December 31, 2013			Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Financial assets
Certificates of deposit	$	1,634		$	—	$	1,634		$	—
Short-term bond mutual funds	7,985			7,985		—			—
Foreign exchange forward contracts	44			—		44			—
Deferred compensation plan assets (1)	1,007			1,007		—			—
Total	$	10,670		$	8,992	$	1,678		$	—
Financial liabilities
Foreign exchange forward contracts	$	(225	)	$	—	$	(225	)	$	—

(1) Recorded as an Other asset with an offsetting liability for the obligation to its employees in Other liabilities.

The Company values its investments in equity securities within the deferred compensation plan and its investments in short term bond mutual funds using level 1 inputs, by obtaining quoted prices in active markets. The deferred compensation plan assets consist of shares of mutual funds. The Company also enters into both cash flow and fair value hedges by purchasing foreign currency exchange forward contracts. These contracts are valued using level 2 inputs, primarily observable forward foreign exchange rates. The certificates of deposit that are used to collateralize some of the Company’s letters of credit have been valued using information classified as level 2, as these are not traded on the open market and are held unsecured by one counterparty.

The carrying values of cash and cash equivalents, trade and other receivables and trade payables are considered to be representative of their respective fair values.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with ASC 820. The Company’s assets and liabilities measured at fair value on a nonrecurring basis include property, plant and equipment, goodwill, intangibles and other assets. These assets are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that impairment may exist. As of June 30, 2014, there were no indications or circumstances indicating that an impairment might exist.