Fair Value Accounting

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

	⋅	Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
	⋅	Level 2 – Include other inputs that are directly or indirectly observable in the marketplace.
	⋅	Level 3 – Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The Company classifies its marketable securities as available-for-sale, which are reported at fair value. Unrealized holding gains and losses, net of the related income tax effect, if any, on available-for-sale securities are excluded from income and are reported as other comprehensive income in the Statement of Other Comprehensive Income. Realized gains and losses from securities classified as available for-sale are included in net income. The Company measures the fair value of its marketable securities based on quoted prices for identical securities in active markets, or Level 1 inputs. As of December 31, 2014, available-for-sale securities consisted of the following:

			Gross
(in thousands)	Cost		Unrealized		Fair
Available for Sale	Basis		Gains		Value
Tax-Advantaged Bond Fund	$	505	$	99	$	604

The Company reviews its marketable securities to determine whether a decline in fair value of a security below the cost basis is other than temporary. Should the decline be considered other than temporary, the Company writes down the cost basis of the security and includes the loss in current earnings as opposed to an unrealized holding loss. No losses for other than temporary impairments in the Company’s marketable securities portfolio were recognized during the quarter ended December 31, 2014.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

(in thousands)	Carrying
December 31, 2014	Amount		Level 1		Level 2		Level 3
Marketable securities	$	604	$	604	$	-	$	-

(in thousands)	Carrying
September 30, 2014	Amount		Level 1		Level 2		Level 3
Marketable securities	$	596	$	596	$	-	$	-