13. Fair Value

The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term nature of these instruments. The Company's current investments as of December 31, 2016 include certificates of deposits and pre-refunded municipal bonds that are classified by management as held-to-maturity as the Company had the positive intent and ability to hold to maturity. The carrying value of these current investments approximate fair values due to the short-term nature of these instruments. The Company has classified these instruments as Level 2 in the fair value hierarchy. Fair value estimates are made at a specific point in time, based on relevant market information.

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

	Fair Value at December 31, 2015
	Level 1		Level 2		Level 3		Total

Financial assets (liabilities):
Cash equivalents and current investments	$	47,121	$	─	$	─	$	47,121
Forward contracts	─			485	─			485
Life insurance contracts	─		─			27,292		27,292
Total	$	47,121	$	485	$	27,292	$	74,898

	Fair Value at December 31, 2016
	Level 1		Level 2		Level 3		Total

Financial assets (liabilities):
Cash equivalents and current investments	$	50,307	$	─	$	─	$	50,307
Other long term assets		2,782	─		─			2,782
Forward contracts	─			1,371	─			1,371
Life insurance contracts	─		─			32,286		32,286
Total	$	53,089	$	1,371	$	32,286	$	86,746

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 $14.4 million and $10.9 million as of December 31, 2015 and 2016, respectively, 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 as discussed in Note 17, "Derivative Financial Instruments".

Life insurance 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 life insurance contracts as the cash-surrender value of life insurance policies held in its Rabbi Trust as disclosed in Note 16, "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):

Life Insurance Contracts	2015			2016

Beginning balance at January 1	$	26,280		$	27,292
Actual return on plan assets:
Relating to assets still held at the reporting date		(1,597	)		2,196
Purchases and issuances		3,025			3,051
Sales and settlements		(416	)		(252	)
Transfers into Level 3	─			─
Ending balance at December 31	$	27,292		$	32,287