Short-Term Investments and Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Short-Term Investments and Fair Value Measurements

Short-Term Investments and Fair Value Measurements

(2) Short Term Investments and Fair Value Measurements

Short term investments are summarized as follows:

	As of September 30, 2014
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Market Value
Commercial paper	$	49,722	$	—	$	(2	)	$	49,720
Total	$	49,722	$	—	$	(2	)	$	49,720

	As of December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Market Value
Commercial paper	$	54,431	$	—	$	(2	)	$	54,429
Total	$	54,431	$	—	$	(2	)	$	54,429

The following tables present the Company’s fair value hierarchy for its assets and liabilities:

	As of September 30, 2014
	Aggregate Fair Value		Level 1		Level 2		Level 3
Assets:
Money market accounts	$	86,342	$	86,342	$	—	$	—
Commercial paper	49,720		—		49,720		—
Total assets measured at fair value	$	136,062	$	86,342	$	49,720	$	—
Liabilities:
Acquisition related contingent consideration	$	2,470	$	—	$	—	$	2,470
Total liabilities measured at fair value	$	2,470	$	—	$	—	$	2,470

	As of December 31, 2013
	Aggregate Fair Value		Level 1		Level 2		Level 3
Assets:
Money market accounts	$	81,548	$	81,548	$	—	$	—
Commercial paper	54,429		—		54,429		—
Total assets measured at fair value	$	135,977	$	81,548	$	54,429	$	—

The Company’s investments classified as level 2 are priced using quoted market prices for identical assets which are subject to infrequent transactions. Cash equivalents consist of balances in money market accounts which are classified as a level 1 measurement based on bank reporting. The Company reassesses the fair value of contingent consideration to be settled in cash related to the WebDAM acquisition on a quarterly basis using the Monte-Carlo simulation approach. This contingency is considered a level 3 measurement. Significant assumptions used in the measurement include probabilities of achieving certain milestones and discount rates which are based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value. As a result of a shorter discounting period, the Company recorded a change in the fair value of the contingent consideration in the amount of $70 and $110 during the three and nine months ended September 30, 2014, respectively, which is included in other (expense) income, net. As of September 30, 2014, the fair value of the contingent consideration increased to $2,470 based on its current fair value and is included in other non-current liabilities.

Cash, accounts receivable, restricted cash, accounts payable, accrued expenses and deferred revenue carrying amounts approximate fair value because of the short-term maturity of these instruments. The Company’s non-financial assets, which include property and equipment, intangible assets and goodwill, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required and the Company is required to evaluate the non-financial asset for impairment, a resulting asset impairment would require that the non-financial asset be recorded at the fair value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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