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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2012
FAIR VALUE MEASUREMENTS

NOTE 4:- FAIR VALUE MEASUREMENTS

In accordance with ASC 820, the Company measures its cash equivalents, short-term deposits, marketable securities, auction rate securities and foreign currency derivative contracts at fair value. Cash equivalents, short-term deposits, and marketable securities, except investments in auction rate securities are classified within Level 1 or Level 2. This is because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.

Investments in auction rate securities are classified within Level 3. The Company values the Level 3 investments based on an externally developed valuation using discounted cash flow model, whose inputs include interest rate curves, credit spreads, bond prices, volatilities and illiquidity considerations and/or existing market pricing. Unobservable inputs used in these models are significant to the fair value of the investments.

 

The Company’s financial assets measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of the following dates:

 

     December 31, 2011  
     Fair value measurements using input type  
     Level 1      Level 2     Level 3      Total  

Cash equivalents:

           

Money market funds

    $ 303,780       $ —        $ —         $ 303,780   

Marketable securities:

           

Government and corporate debentures - fixed interest rate

      —           1,624,096        —           1,624,096   

Government-sponsored enterprises

      —           337,471        —           337,471   

Government and corporate debentures - floating interest rate

      —           195,759        —           195,759   

Auction rate securities

      —           —          6,078         6,078   

Foreign currency derivative contracts

      —           (351 )      —           (351 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

Total financial assets

    $ 303,780       $ 2,156,975      $ 6,078       $ 2,466,833   
  

 

 

     

 

 

    

 

 

     

 

 

  

 

     December 31, 2012  
     Fair value measurements using input type  
     Level 1      Level 2      Level 3      Total  

Cash equivalents:

            

Money market funds

    $ 169,894       $ —         $ —         $ 169,894   

Marketable securities:

            

Government and corporate debentures - fixed interest rate

      —           1,941,781         —           1,941,781   

Government-sponsored enterprises

      —           444,879         —           444,879   

Government and corporate debentures - floating interest rate

      —           98,148         —           98,148   

Auction rate securities

      —           —           2,697         2,697   

Foreign currency derivative contracts

      —           1,469         —           1,469   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total financial assets

    $ 169,894       $ 2,486,277       $ 2,697       $ 2,658,868   
  

 

 

     

 

 

     

 

 

     

 

 

  

The following table presents the changes in Level 3 instruments measured on a recurring basis for the year ended December 31, 2012:

 

     Auction rate
securities		  

Balance at January 1, 2011

    $ 7,990   

Recognized gains in income

      2,017   

Securities sold during 2011

      (3,929 ) 
  

 

 

  

Balance at December 31, 2011

      6,078   

Securities sold during 2012

      (3,381 ) 
  

 

 

  

Balance at December 31, 2012

    $ 2,697