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Fair Value
 12 Months Ended
Dec. 31, 2013
Fair Value [Abstract]  
Fair Value
12.            Fair Value

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 and December 31, 2013 (U.S. dollars in thousands):

 
 
Fair Value at December 31, 2012
 
 
 
Level 1
  
Level 2
  
Level 3
  
Total
 
 
 
  
  
  
 
Financial assets (liabilities):
 
  
  
  
 
Cash equivalents and current investments
 
$
76,006
  
$
-
  
$
-
  
$
76,006
 
Forward contracts
  
-
   
2,969
   
-
   
2,969
 
Insurance company contracts
  
-
   
-
   
18,605
   
18,605
 
Total
 
$
76,006
  
$
2,969
  
$
18,605
  
$
97,580
 
 

 
TABLE OF CONTENTS
 
NU SKIN ENTERPRISES, INC.
Notes to Consolidated Financial Statements
 


 
 
Fair Value at December 31, 2013
 
 
 
Level 1
  
Level 2
  
Level 3
  
Total
 
 
 
  
  
  
 
Financial assets (liabilities):
 
  
  
  
 
Cash equivalents and current investments
 
$
61,136
  
$
-
  
$
-
  
$
61,136
 
Forward contracts
  
-
   
1,939
   
-
   
1,939
 
Insurance company contracts
  
-
   
-
   
23,172
   
23,172
 
Total
 
$
61,136
  
$
1,939
  
$
23,172
  
$
86,247
 

The following methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair value in the consolidated balance sheets:

Cash equivalents and current investments: Cash equivalents and current investments primarily consist of highly rated money market funds with maturities of three months or less, and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, the Company considers all cash equivalents and current investments as Level 1.Current investments include $22.0 million that is restricted for the Company's voluntary participation in a consumer protection cooperative in South Korea.

Forward contracts:  To hedge foreign currency risks, the Company uses foreign currency exchange forward contracts, where possible and practical. These forward contracts are valued using standard valuation formulas with assumptions about foreign currency exchange rates derived from existing exchange rates.

Insurance Company Contracts: ASC 820 preserves practicability exceptions to fair value measurements provided by other applicable GAAP. The guidance in ASC 715-30-35-60 allows a reporting entity, as a practical expedient, to use cash surrender value or conversion value as an expedient for fair value when it is present. Accordingly, the Company determines the fair value of its insurance company contracts as the cash-surrender value of life insurance policies held in its Rabbi Trust as disclosed in Note 15 "Executive Deferred Compensation Plan".

The following table provides a summary of changes in fair value of the Company's Level 3 marketable securities (U.S. dollars in thousands):


Insurance Company Contracts
 
2012
  
2013
 
 
 
  
 
Beginning balance at January 1
 
$
14,925
  
$
$18,605
 
Actual return on plan assets:
        
Relating to assets still held at the reporting date
  
1,560
   
2,568
 
Purchases and issuances
  
2,970
   
3,408
 
Sales and settlements
  
(850
)
  
(1,409
)
Transfers into Level 3
  
-
   
-
 
Ending balance at December 31
 
$
18,605
  
$
23,172