Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2015

Note 2: Fair Value of Financial Instruments

The estimated fair values of financial instruments outstanding were (in thousands):

	September 30, 2015
	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash and cash equivalents	$	1,585	$	—	$	—		$	1,585

Short-term investments:
U.S. government-sponsored enterprise bonds	$	8,439	$	2	$	(1	)	$	8,440
Corporate notes	11,924		—		(3		)	11,921
Municipal bonds	996		—		—			996
Certificates of deposit	240		—		—			240
Commercial paper	—		—		—			—

Total short-term investments	$	21,599	$	2	$	(4	)	$	21,597

Long-term investments:
Corporate notes	2,270		—		(1		)	2,269

Total long-term investments	$	2,270	$	—	$	(1	)	$	2,269

	December 31, 2014
	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash and cash equivalents	$	3,110	$	—	$	—		$	3,110

Short-term investments:
U.S. government-sponsored enterprise bonds	$	1,250	$	—	$	—		$	1,250
Municipal bonds	841		—		—			841
Corporate notes	15,921		2		(6		)	15,917
Certificates of deposit	2,430		1		—			2,431

Total short-term investments	$	20,442	$	3	$	(6	)	$	20,439

Long-term investments:
U.S. government-sponsored enterprise bonds	$	1,000	$	—	$	(2	)	$	998
Corporate notes	1,252		—		(5		)	1,247

Total long-term investments	$	2,252	$	—	$	(7	)	$	2,245

The estimated fair values of available-for-sale securities with unrealized losses were (in thousands):

	September 30, 2015
	Cost		Unrealized Losses			Fair Value
Short-term investments:
U.S. government-sponsored enterprise bonds	$	3,363	$	(1	)	$	3,362
Corporate notes	7,461		(3		)	7,458

Total short-term investments	$	10,824	$	(4	)	$	10,820

Long-term investments:
Corporate notes	2,270		(1		)	2,269

Total long-term investments	$	2,270	$	(1	)	$	2,269

	December 31, 2014
	Cost		Unrealized Losses			Fair Value
Short-term investments:
Corporate notes	$	13,006	$	(6	)	$	13,000

Total short-term investments	$	13,006	$	(6	)	$	13,000

Long-term investments:
U.S. government-sponsored enterprise bonds	$	1,000	$	(2	)	$	998
Corporate notes	1,252		(5		)	1,247

Total long-term investments	$	2,252	$	(7	)	$	2,245

As of September 30, 2015 and December 31, 2014, all of the available-for-sale securities with unrealized losses had been in a loss position for less than 12 months.

Cost and fair value of investments based on two maturity groups were (in thousands):

	September 30, 2015
	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Due within 1 year	$	21,599	$	2	$	(4	)	$	21,597
Due in 1-2 years	2,270		—		(1		)	2,269

Total	$	23,869	$	2	$	(5	)	$	23,866

	December 31, 2014
	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Due within 1 year	$	20,442	$	3	$	(6	)	$	20,439
Due in 1-2 years	2,252		—		(7		)	2,245

Total	$	22,694	$	3	$	(13	)	$	22,684

The following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) as of September 30, 2015 and December 31, 2014 (in thousands):

	September 30, 2015
	Fair Value		Level 1		Level 2		Level 3
Money market funds	$	203	$	203	$	—	$	—
U.S. government-sponsored enterprise bonds	8,440		—		8,440		—
Corporate notes	14,190		—		14,190		—
Municipal bonds	996		—		996		—
Certificates of deposit	405		—		405		—
Commercial paper	650		—		650		—

Total assets	$	24,884	$	203	$	24,681	$	—

	December 31, 2014
	Fair Value		Level 1		Level 2		Level 3
Money market funds	$	1,837	$	1,837	$	—	$	—
U.S. government-sponsored enterprise bonds	2,248		—		2,248		—
Municipal bonds	1,243		—		1,243		—
Corporate notes	17,164		—		17,164		—
Certificates of deposit	2,676		—		2,676		—

Total assets	$	25,168	$	1,837	$	23,331	$	—

There were no transfers in or out of Level 1 and Level 2 securities during the three or nine months ended September 30, 2015 and 2014.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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