4. Fair Value

Financial assets and liabilities, measured at fair value on a recurring basis by level within the fair value hierarchy, consisted of the following (in thousands):


	September 30,				June 30,
	2014				2014
	Level 1		Level 3		Level 1		Level 3
Assets:
Money market funds	$	441,985	$	—	$	439,675	$	—
Auction rate securities		—		18,456		—		19,785

Total available-for-sale securities	$	441,985	$	18,456	$	439,675	$	19,785

Liabilities:
Contingent consideration liabilities recorded for business combinations	$	—	$	85,460	$	—	$	110,122

In our condensed consolidated balance sheets as of September 30, 2014 and June 30, 2014, money market balances were included in cash and cash equivalents and auction rate securities, or ARS investments, were included in non-current investments and $600,000 of the ARS investments were included in prepaid expenses and other current assets as of September 30, 2014. The short-term portion of the contingent consideration liability recorded for business combinations was a separate line item in current liabilities and the long-term portion of $39.2 million and $52.7 million was included in the non-current portion of other liabilities as of September 30, 2014 and June 30, 2014, respectively.

Changes in fair value of our Level 3 financial assets as of September 30, 2014 were as follows (in thousands):


Balance as of June 30, 2014	$	19,785
Net unrealized gain		71
Redemptions		(1,400	)

Balance as of September 30, 2014	$	18,456

Changes in fair value of our Level 3 contingent consideration liabilities as of September 30, 2014 were as follows (in thousands):


Balance as of June 30, 2014	$	110,122
Cash settlement of contingent consideration liability		(358	)
Issuance of common stock in settlement of liability		(19,802	)
Accretion and remeasurement		(4,502	)

Balance as of September 30, 2014	$	85,460

In connection with our acquisition of Validity Sensors, Inc., or Validity, we entered into a contingent consideration arrangement and as of September 30, 2014, we may be required to make additional cash payments of up to $145.8 million as consideration to the former Validity stockholders and option holders based on unit sales of products utilizing Validity technology through March 2016.

In connection with our acquisition of Pacinian Corporation, or Pacinian, we entered into a contingent consideration arrangement and subsequently paid $5.0 million of additional consideration to the former Pacinian stockholders upon customer acceptance of a ThinTouch product. As of September 30, 2014, we may be required to make additional cash payments of up to $10.0 million as consideration to the former Pacinian stockholders based on unit sales of products utilizing ThinTouch technology through June 2016.

There were no transfers in or out of our Level 1, 2, or 3 assets or liabilities during the three months ended September 30, 2014 and 2013.

The fair values of our accounts receivable and accounts payable approximate their carrying values because of the short-term nature of those instruments. Intangible assets, property and equipment, and goodwill are measured at fair value on a non-recurring basis if impairment is indicated.