4)	Fair Value Measurements

In accordance with the provisions of fair value accounting, a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:


Level 1		Quoted prices in active markets for identical assets or liabilities assessed as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.


Level 2		Observable inputs other than Level 1 prices, 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 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments or securities or derivative contracts that are valued using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

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. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such assets and liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Assets and liabilities of the Company are measured at fair value on a recurring basis as of March 31, 2017 and are summarized as follows:


			Fair Value Measurements at Reporting Date Using
Description	March 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	$	1,263	$	1,263	$	—	$	—
Time deposits and certificates of deposit		2,300		—		2,300		—
Bankers’ acceptance drafts		682		—		682		—
Commercial paper		10,604		—		10,604		—
Corporate obligations		1,550		—		1,550		—
Restricted cash – money market funds		5,274		5,274		—		—
Available-for-sale investments:
Time deposits and certificates of deposit		3,479		—		3,479		—
Bankers’ acceptance drafts		1,117		—		1,117		—
Asset-backed securities		36,682		—		36,682		—
Commercial paper		12,134		—		12,134		—
Corporate obligations		51,393		—		51,393		—
Municipal bonds		251		—		251		—
Promissory note		675		—		675		—
U.S. treasury obligations		20,424		—		20,424		—
U.S. agency obligations		29,144		—		29,144		—
Group insurance contracts		5,633		—		5,633		—
Derivatives – currency forward contracts		664		—		664		—
Derivatives – options contracts		14		—		14		—
Funds in investments and other assets:
Israeli pension assets		14,024		—		14,024		—
Derivatives – interest rate hedge – non-current		5,428		—		5,428		—
Restricted cash – non-current		744		744		—		—

Total assets	$	203,479	$	7,281	$	196,198	$	—

Liabilities:

Derivatives – currency forward contracts	$	3,666	$	—	$	3,666	$	—

Reported as follows:
Assets:
Cash and cash equivalents⁽¹⁾	$	16,399	$	1,263	$	15,136	$	—
Restricted cash		5,274		5,274		—		—
Short-term investments		155,299		—		155,299		—
Other current assets		678		—		678		—

Total current assets	$	177,650	$	6,537	$	171,113	$	—

Long-term investments⁽²⁾		5,633		—		5,633		—
Other long-term assets		19,452		—		19,452		—
Restricted cash – non-current		744		744		—		—

Total long-term assets	$	25,829	$	744	$	25,085	$	—

Liabilities:

Other current liabilities	$	3,666	$	—	$	3,666	$	—

⁽¹⁾	The cash and cash equivalent amounts presented in the table above do not include cash of $238,663 and non-negotiable time deposits of $850 as of March 31, 2017.

⁽²⁾	The long-term investments presented in the table above do not include our minority interest investment in a private company, which is accounted for under the cost method.

Assets and liabilities of the Company are measured at fair value on a recurring basis as of December 31, 2016 and are summarized as follows:


			Fair Value Measurements at Reporting Date Using
Description	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents:
Money market funds	$	10,155	$	10,155	$	—	$	—
Time deposits and certificates of deposit		4,900		—		4,900		—
Bankers acceptance drafts		448		—		448		—
Commercial paper		11,828		—		11,828		—
Corporate obligations		2,025		—		2,025		—
U.S. agency obligations		3,899		—		3,899		—
Restricted cash – money market funds		5,287		5,287		—		—
Available-for-sale securities:
Time deposits and certificates of deposit		23,818		—		23,818		—
Bankers acceptance drafts		1,439		—		1,439		—
Asset-backed securities		36,809		—		36,809		—
Commercial paper		24,381		—		24,381		—
Corporate obligations		46,707		—		46,707		—
Municipal bonds		591		—		591		—
Promissory note		675		—		675		—
U.S. treasury obligations		25,414		—		25,414		—
U.S. agency obligations		29,629		—		29,629		—
Group insurance contracts		5,558		—		5,558		—
Derivatives – currency forward contracts		2,985		—		2,985		—
Derivatives – options contracts		4		—		4		—
Funds in investments and other assets:
Israeli pension assets		13,910		—		13,910		—
Derivatives – interest rate hedge – non-current		4,900		—		4,900		—
Restricted cash – non-current		573		573		—		—

Total assets	$	255,935	$	16,015	$	239,920	$	—

Liabilities:
Derivatives – currency forward contracts	$	543	$	—	$	543	$	—
Derivatives – options contracts		16		—		16		—

Total liabilities	$	559	$	—	$	559	$	—

Assets:
Cash and cash equivalents⁽¹⁾	$	33,255	$	10,155	$	23,100	$	—
Restricted cash		5,287		5,287		—		—
Short-term investments		189,463		—		189,463		—
Other current assets		2,989		—		2,989		—

Total current assets	$	230,994	$	15,442	$	215,552	$	—

Long-term investments⁽²⁾	$	5,558	$	—	$	5,558	$	—
Other long-term assets		18,810		—		18,810		—
Restricted cash – non-current		573		573		—		—

Total long-term assets	$	24,941	$	573	$	24,368	$	—

Liabilities:
Other current liabilities	$	559	$	—	$	559	$	—

⁽¹⁾	The cash and cash equivalent amounts presented in the table above do not include cash of $192,432 and non-negotiable time deposits of $2,936 as of December 31, 2016.

⁽²⁾	The long-term investments presented in the table above do not include our minority interest investment in a private company, which is accounted for under the cost method.

Money Market Funds

Money market funds are cash and cash equivalents and are classified within Level 1 of the fair value hierarchy.

Restricted Cash

The Company has letters of credit, which require it to maintain specified cash deposit balances, consisting mainly of money market funds, as collateral. Such amounts have been classified as restricted cash and are classified as Level 1.

Available-For-Sale Investments

Available-for-sale investments consists of time deposits and drafts denominated in the Euro currency, certificates of deposit, bankers acceptance drafts, asset-backed securities (which include auto loans, credit card receivables and equipment trust receivables), corporate obligations, municipal bonds, U.S. treasury obligations and U.S. agency obligations.

The Company measures its debt and equity investments at fair value. The Company’s available-for-sale investments are classified within Level 1 and Level 2 of the fair value hierarchy.

Israeli Pension Assets

Israeli pension assets represent investments in mutual funds, government securities and other time deposits. These investments are set aside for the retirement benefit of the employees at the Company’s Israeli subsidiaries. These funds are classified within Level 2 of the fair value hierarchy.

Derivatives

As a result of the Company’s global operating activities, the Company is exposed to market risks from changes in foreign currency exchange rates, which may adversely affect its operating results and financial position. When deemed appropriate, the Company minimizes its risks from foreign currency exchange rate fluctuations through the use of derivative financial instruments. The principal market in which the Company executes its foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. The forward foreign currency exchange contracts are valued using broker quotations or market transactions and are classified within Level 2 of the fair value hierarchy.