Annual report pursuant to Section 13 and 15(d)

Fair Value of Investments

v3.10.0.1
Fair Value of Investments
12 Months Ended
Dec. 31, 2018
Fair Value  
Fair Value

5.Fair Value of Investments

 

The Company has elected the FVO for all investments in debt securities.  Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for classification and disclosure of fair value measurements as follows:

 

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 Company classifies cash and investments in U.S. government securities as Level 1 within the fair value hierarchy.  Accounts receivable, short-term other assets, accounts payable and accrued liabilities are also classified as Level 1.  The carrying amounts of these assets and liabilities approximate their fair values due to their relatively short-term nature. Investments in corporate bonds and commercial paper are classified as Level 2 within the fair value hierarchy. The fair value of long-term debt is estimated by calculating the net present value of future debt payments at current market interest rates and is classified as Level 2.  

 

The following table represents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices in Active Markets for Indentical Assets
(Level 1)

 

Significant Other Observable Inputs
(Level 2)

 

Significant Other Unobservable Inputs
(Level 3)

 

Total

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

12,947

 

$

 —

 

$

 —

 

$

12,947

U.S. government securities

 

 

15,923

 

 

 —

 

 

 —

 

 

15,923

Corporate bonds

 

 

 —

 

 

31,495

 

 

 —

 

 

31,495

Commerical paper

 

 

 —

 

 

27,869

 

 

 —

 

 

27,869

Asset-backed securities

 

 

 —

 

 

17,025

 

 

 —

 

 

17,025

Total assets

 

$

28,870

 

$

76,389

 

$

 —

 

$

105,259

 

There were no changes in the levels or methodology of the measurement of financial assets or liabilities during the year ended December 31, 2018.  There were no investments as of December 31, 2017.  The maturity date of all of the Company’s investments is less than one year.