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Fair Value Measurement Of Assets And Liabilities | 12 Months Ended
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Dec. 31, 2011
Fair Value Measurement Of Assets And Liabilities [Abstract] |
Fair Value Measurement Of Assets And Liabilities |
3. | Fair Value Measurement of Assets and Liabilities
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A fair value measurement reflects the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risk inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model. We classify our inputs to measure fair value using a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows: Level 1: Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE). Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs include benchmark yields, trade data, reported trades and broker dealer quotes, two-sided markets and industry & economic events, yield to maturity, Municipal Securities Rule Making Board reported trades and vendor trading platform data. Level 2 includes those financial instruments that are valued using various pricing services and broker pricing information including Electronic Communication Networks and broker feeds. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources, including the Company's own assumptions. The fair value of the majority of our cash equivalents and marketable equity securities were determined based on Level 1 inputs. The fair value of our marketable debt securities was determined based on Level 2 inputs. At December 31, 2011, the Company did not have any securities in the Level 3 category. The Company reviews the fair value hierarchy classification on a quarterly basis. We validate the quoted market prices provided by our primary pricing service by comparing their assessment of the fair values of our investments by using a third party investment manager. The third party investment manager uses similar techniques to our primary pricing service to derive the pricing describe above. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The following table summarizes the Company's financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of December 31, 2011 (in thousands):
Description |  | Balance as of December 31, 2011 |  |  | Level 1 |  |  | Level 2 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 25,137 |  |  | $ | 25,137 |  |  | $ | — |
US Treasury notes |  |  | 5,784 |  |  |  | — |  |  |  | 5,784 |
Total cash equivalents |  |  | 30,921 |  |  |  | 25,137 |  |  |  | 5,784 |
Short-term marketable securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate debenture/bonds |  |  | 8,612 |  |  |  | — |  |  |  | 8,612 |
Municipal bonds |  |  | 8,384 |  |  |  | — |  |  |  | 8,384 |
Certificates of deposit |  |  | 4,321 |  |  |  | — |  |  |  | 4,321 |
Government agency securities |  |  | 6,912 |  |  |  | — |  |  |  | 6,912 |
Marketable equity securities |  |  | 38 |  |  |  | 38 |  |  |  | — |
Total short-term marketable securities |  |  | 28,267 |  |  |  | 38 |  |  |  | 28,229 |
Long-term marketable securities: |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds |  |  | 5,969 |  |  |  | — |  |  |  | 5,969 |
Certificates of deposit |  |  | 3,788 |  |  |  | — |  |  |  | 3,788 |
Government agency securities |  |  | 3,738 |  |  |  | — |  |  |  | 3,738 |
Total long-term marketable securities |  |  | 13,495 |  |  |  | — |  |  |  | 13,495 |
Total financial assets |  | $ | 72,683 |  |  | $ | 25,175 |  |  | $ | 47,508 |
The following table summarizes the Company's financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of December 31, 2010 (in thousands):
Description |  | Balance as of December 31, 2010 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 5,380 |  |  | $ | 5,380 |  |  | $ | — |  |  | $ | — |
Total cash equivalents |  |  | 5,380 |  |  |  | 5,380 |  |  |  | — |  |  |  | — |
Short-term marketable securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debenture/bonds |  |  | 33,384 |  |  |  | — |  |  |  | 33,384 |  |  |  | — |
Municipal bonds |  |  | 5,255 |  |  |  | — |  |  |  | 5,255 |  |  |  | — |
Certificates of deposit |  |  | 925 |  |  |  | — |  |  |  | 925 |  |  |  | — |
Government agency securities |  |  | 20,211 |  |  |  | — |  |  |  | 20,211 |  |  |  | — |
Total short-term marketable securities |  |  | 59,775 |  |  |  | — |  |  |  | 59,775 |  |  |  | — |
Description |  | Balance as of December 31, 2010 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Long-term marketable securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debenture/bonds |  |  | 8,794 |  |  |  | — |  |  |  | 8,794 |  |  |  | — |
Certificates of deposit |  |  | 2,403 |  |  |  | — |  |  |  | 2,403 |  |  |  | — |
Government agency securities |  |  | 9,479 |  |  |  | — |  |  |  | 9,479 |  |  |  | — |
Total long-term marketable securities |  |  | 20,676 |  |  |  | — |  |  |  | 20,676 |  |  |  | — |
Total financial assets |  | $ | 85,831 |  |  | $ | 5,380 |  |  | $ | 80,451 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration liability |  | $ | (880 | ) |  | $ | — |  |  | $ | — |  |  | $ | (880 | )
Foreign exchange forward contracts |  |  | (8 | ) |  |  | — |  |  |  | (8 | ) |  |  | — |
Total financial liabilities |  | $ | (888 | ) |  | $ | — |  |  | $ | (8 | ) |  | $ | (880 | )
There were no transfers between Level 1 and Level 2 securities during the year ended December 31, 2011 and 2010. All of our long-term marketable debt securities had maturities of between one and two years in duration at December 31, 2011. The table below presents Level 3 activity for our contingent consideration liability for the twelve months ended December 31, 2011 (in thousands):
Contingent consideration liability |  | Level 3 |
Beginning balance at January 1, 2011 |  | $ | (880 | )
Adjustments |  |  | 880 |
Ending balance at December 31, 2011 |  | $ | — |
As of December 31, 2011, the Company had no outstanding foreign currency exchange forward contracts. At December 31, 2010, the Company recorded an unrealized loss of $8,000 on its outstanding foreign currency forward exchange contracts. For the years ended December 31, 2011, 2010 and 2009, the Company recorded gains of $8,000, gains of $38,000 and losses of $446,000, respectively, on its Euro-denominated foreign exchange forward contracts. During the years ended December 31, 2011, 2010 and 2009, the Company recorded foreign currency gains and losses on foreign currency denominated transactions of approximately $836,000 loss, $1.7 million gain and $420,000 loss, respectively. The loss during the year ended December 31, 2011 primarily related to foreign currency losses on South Korean won denominated trade payables. The gains during the year ended December 31, 2010 primarily relate to a $2.9 million foreign currency gain realized on the liquidation of the Company's cash holdings in Euros at the conclusion of the insolvency proceeding for the sale of Cinterion net of $1.2 million in expense to enter into several Euro-denominated put options to hedge the foreign currency risk associated with its cash holdings in Euros related to the Cinterion bid process. These put options expired unexercised on June 25, 2010. All recorded gains and losses on foreign exchange transactions are recorded in other income (expense), net, within the consolidated statements of operations.

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- Definition Tabular disclosure of the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods. Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19279-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 32 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 33 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 10 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 6 -Footnote 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19190-110258 + Details
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