Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.10.0.1
Fair Value Measurements
6 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS
NOTE 3 – FAIR VALUE MEASUREMENTS
Our financial assets and liabilities are measured and recorded at fair value, except for our debt and certain equity investments in privately-held companies. Prior to July 1, 2018 , the equity investments were generally accounted for under the cost method of accounting and were periodically assessed for other-than-temporary impairment when an event or circumstance indicated that an other-than-temporary decline in value may have occurred. Effective July 1, 2018 , equity investments without a readily available fair value are accounted for using the measurement alternative. The measurement alternative is calculated as cost minus impairment, if any, plus or minus changes resulting from observable price changes.
Our non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred.
Fair Value of Financial Instruments. We have evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The fair value of our cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate their carrying amounts due to the relatively short maturity of these items.
Fair Value Hierarchy. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
Level 1
Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2
估值报价基于类似美国卫生工程师协会(asse)ts or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3
Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
As of December 31, 2018 , the types of instruments valued based on quoted market prices in active markets included money market funds, certain U.S. Treasury securities and U.S. Government agency securities. Such instruments are generally classified within Level 1 of the fair value hierarchy. The types of instruments valued based on other observable inputs included corporate debt securities, sovereign securities and certain U.S. Treasury securities. The market inputs used to value these instruments generally consist of market yields, reported trades and broker/dealer quotes. Such instruments are generally classified within Level 2 of the fair value hierarchy.
The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants generally are large financial institutions. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy.
The fair value of contingent consideration payable, which resulted from the acquisitions of privately-held companies, was classified as Level 3 and estimated using significant inputs that were not observable in the market.
Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheet as follows:
As of December 31, 2018 (In thousands)
Total
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Little or no market activity
Inputs
(Level 3)
Assets
Cash equivalents:
Money market funds and other
$
877,527

$
877,527

$

$

U.S. Treasury securities
668,058


668,058


Marketable securities:
Corporate debt securities
500,594


500,594


Sovereign securities
10,919


10,919


U.S. Government agency securities
172,615

172,615



U.S. Treasury securities
211,588

211,588



Total cash equivalents and marketable securities (1)
2,441,301

1,261,730

1,179,571


Other current assets:
Derivative assets
1,732


1,732


Other non-current assets:
Executive Deferred Savings Plan
181,104

137,301

43,803


Total financial assets (1)
$
2,624,137

$
1,399,031

$
1,225,106

$

Liabilities
Other current liabilities:
Derivative liabilities
$
(14,318
)
$

$
(14,318
)
$

Contingent consideration payable

(2,529
)


(2,529
)
Total financial liabilities
$
(16,847
)
$

$
(14,318
)
$
(2,529
)
________________
(1) Excludes cash of $204.5 million held in operating accounts and time deposits of $48.3 million as of December 31, 2018 .

Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis, as of the date indicated below, were presented on our Condensed Consolidated Balance Sheet as follows:
As of June 30, 2018 (In thousands)
Total
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable Inputs
(Level 2)
Assets
Cash equivalents:
Corporate debt securities
$
4,995

$

$
4,995

Money market funds and other
863,115

863,115


U.S. Government agency securities
7,675


7,675

U.S. Treasury securities
1,996


1,996

Marketable securities:
Corporate debt securities
735,408


735,408

Sovereign securities
17,142


17,142

U.S. Government agency securities
316,022

299,501

16,521

U.S. Treasury securities
405,654

364,574

41,080

Total cash equivalents and marketable securities (1)
2,352,007

1,527,190

824,817

Other current assets:
Derivative assets
5,385


5,385

Other non-current assets:
Executive Deferred Savings Plan
197,213

143,580

53,633

Total financial assets (1)
$
2,554,605

$
1,670,770

$
883,835

Liabilities
Other current liabilities:
Derivative liabilities
$
(6,828
)
$

$
(6,828
)
Total financial liabilities
$
(6,828
)
$

$
(6,828
)
________________
(1) Excludes cash of $473.8 million held in operating accounts and time deposits of $54.5 million as of June 30, 2018 .
There were no transfers between Level 1 and Level 2 fair value measurements during the six months ended December 31, 2018 . We did not have any assets or liabilities measured at fair value on a recurring basis within Level 3 fair value measurements as of June 30, 2018 .
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