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Note 4 - Fair Value Measurements
 6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
4.
Fair Value Measurements
 
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy based on
three
levels of inputs, of which the
first
two
are considered observable and the last unobservable, that
may
be used to measure fair value is as follows:
 
  ● Level 
1
 — Observable inputs such as quoted prices in active markets for identical assets or liabilities.
     
  ● Level 
2
 — Inputs other than Level 
1
that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are
not
active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
     
  ● Level 
3
 — Unobservable inputs that are supported by little or
no
market activity and that are significant to the fair value of the assets or liabilities.
 
We measure the following financial assets at fair value on a recurring basis. The fair values of these financial assets were as follows (in thousands):
 
         
Fair Value Measurements at Reporting Date Using
  
   
 
 
 
  
Quoted Prices in
    
Significant
    
 
 
 
   
 
 
 
  
Active Markets
    
Other
    
Significant
  
   
Balance at
    
for Identical
    
Observable
    
Unobservable
  
   
June 30
,
    
Assets
    
Inputs
    
Inputs
  
   
201
8
    
(Level 1)
    
(Level 2)
    
(Level 3)
  
Money market funds
   $
237,705
     $
237,705
     $
—
     $
—
  
U.S. treasury bills
    
39,771
      
39,771
      
—
      
—
  
U.S. corporate debt securities
    
19,153
      
—
      
19,153
      
—
  
U.S. commercial paper
    
59,788
      
—
      
59,788
      
—
  
Foreign commercial paper
    
63,304
      
—
      
63,304
      
—
  
Total
   $
419,721
     $
277,476
     $
142,245
     $
—
  
 
         
Fair Value Measurements at Reporting Date Using
  
   
 
 
 
  
Quoted Prices in
    
Significant
    
 
 
 
   
 
 
 
  
Active Markets
    
Other
    
Significant
  
   
Balance at
    
for Identical
    
Observable
    
Unobservable
  
   
December
31,
    
Assets
    
Inputs
    
Inputs
  
   
201
7
    
(Level 1)
    
(Level 2)
    
(Level 3)
  
Money market funds
   $
91,386
     $
91,386
     $
—
     $
—
  
U.S. corporate debt securities
    
17,520
      
—
      
17,520
      
—
  
U.S. commercial paper
    
39,863
      
—
      
39,863
      
—
  
Foreign commercial paper
    
19,854
      
—
      
19,854
      
—
  
Total
   $
168,623
     $
91,386
     $
77,237
     $
—
  
 
We have
not
transferred any investment securities between the
three
levels of the fair value hierarchy.
 
As of
June 30, 2018,
cash equivalents included
$18.0
million of available-for-sale securities with contractual maturities of
three
months or less, and short-term investments included
$164.0
million of available-for-sale securities with contractual maturities of
three
months to
one
year. As of
December 31, 2017,
cash equivalents included
$49.4
million of available-for-sale securities with contractual maturities of
three
months or less, and short-term investments included
$27.8
million of available-for-sale securities with contractual maturities of
three
months to
one
year. The money market funds as of
June 30, 2018
and
December 31, 2017
are included in cash and cash equivalents on the unaudited condensed consolidated balance sheets.
 
A company
may
elect to use fair value to measure accounts and loans receivable, available-for-sale and held-to-maturity securities, equity method investments, accounts payable, guarantees and issued debt. Other eligible items include firm commitments for financial instruments that otherwise would
not
be recognized at inception and non-cash warranty obligations where a warrantor is permitted to pay a
third
party to provide the warranty goods or services. If the use of fair value is elected, any upfront costs and fees related to the item such as debt issuance costs must be recognized in earnings and cannot be deferred. The fair value election is irrevocable and generally made on an instrument-by-instrument basis, even if a company has similar instruments that it elects
not
to measure based on fair value. Unrealized gains and losses on existing items for which fair value has been elected are reported as a cumulative adjustment to beginning retained earnings and any changes in fair value are recognized in earnings. We have elected to
not
apply the fair value option to our financial assets and liabilities.
 
Financial instruments, including cash, cash equivalents, receivables, inventory, prepaid expenses, other current assets, accounts payable and accrued expenses are carried at cost, which is considered to be representative of their respective fair values because of the short-term maturity of these instruments. Short-term available-for-sale investments are carried at fair value. Our Convertible Notes and Promissory Note outstanding at
June 30, 2018
and
December 31, 2017
do
not
have readily available ascertainable market values; however, the carrying values are considered to approximate their fair values.