Fair Value
 9 Months Ended
Sep. 30, 2012
Fair Value [Abstract]  
Fair Value

3. Fair Value

On January 1, 2008, the Company adopted ASC Topic 820, Fair Value Measurements and Disclosures (formerly SFAS No. 157) as it applies to financial assets and financial liabilities. ASC Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the estimated exit price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date rather than on an entry price which represents the purchase price of an asset or liability. ASC Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

 

  •  

Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

 

  •  

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 (i.e., inputs that reflect the reporting entity’s own assumptions about the assumptions that market participants would use in estimating the fair value of an asset or liability) are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In accordance with ASC Topic 820, the following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value on a recurring basis as of September 30, 2012 (in thousands):

 

                                 
          Fair Value Measurements at Reporting Date Using  
    September 30,
2012		     Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3) 		 

Assets

                                

Certificates of deposit

   $ 200     $ 200     $ —       $ —    

Money market funds

     27,517       27,517       —         —    

U.S. Treasury securities

     70,680       —         70,680       —    
   

 

 

    

 

 

    

 

 

    

 

 

  
    $ 98,397     $ 27,717     $ 70,680     $ —    
   

 

 

    

 

 

    

 

 

    

 

 

  

The following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value on a recurring basis as of December 31, 2011 (in thousands):

 

                                 
          Fair Value Measurements at Reporting Date Using  
    December 31,
2011		     Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3) 		 

Assets

                                

Certificates of deposit

   $ 200     $ 200     $ —       $ —    

Money market funds

     9,238       9,238       —         —    

U.S. Treasury securities

     51,703       —         51,703       —    
   

 

 

    

 

 

    

 

 

    

 

 

  
    $ 61,141     $ 9,438     $ 51,703     $ —    
   

 

 

    

 

 

    

 

 

    

 

 

  

No other assets or liabilities were carried at fair value as of September 30, 2012 and December 31, 2011.

Level 2 securities are priced using quoted market prices for similar instruments, nonbinding market prices that are corroborated by observable market data, or discounted cash flow techniques. There were no transfers of assets between different fair-value levels during the periods presented.