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76
The FASB issued other accounting guidance during the period that is not applicable to the Company’s consolidated financial
statements and, therefore, is not discussed above.
3. FAIR VALUE
General
The accounting guidance for fair value measurements defines fair value, establishes a framework for measuring fair value in
accordance with U.S. GAAP, and requires disclosures about fair value measurements. The guidance defines fair value 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. As part of the framework for measuring fair value, the guidance establishes a hierarchy of inputs to valuation
techniques used in measuring fair value 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.
Fair Value Hierarchy
The three levels of the fair value hierarchy are:
Level 1 -- Quoted prices (unadjusted) in active markets for identical, unrestricted assets or liabilities that the Company has
the ability to access at the measurement date;
Level 2 -- Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or
indirectly; and
Level 3 -- Unobservable inputs used in valuations in which there is little market activity for the asset or liability at the
measurement date.
Fair value measurements of assets and liabilities are assigned a level within the fair value hierarchy based on the lowest level of any
input that is significant to the fair value measurement in its entirety.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
December 31, 2015
December 31, 2014
Based on
Based on
Quoted
Quoted
prices in
Other
prices in
Other
active
observable
Unobservabl
e
active
observable
Unobservabl
e
markets
inputs
inputs
markets
inputs
inputs
Fair value
(Level 1)
(Level 2)
(Level 3)
Fair value
(Level 1)
(Level 2)
(Level 3)
Assets measured at fair value on a recurring basis:
Cash equivalents (1)
Money market funds
$
34.9
$
–
$
34.9
$
–
$
185.3
$
–
$
185.3
$
–
Government and agency debt securities
–
–
–
–
6.9
–
6.9
–
Total cash equivalents
34.9
–
34.9
–
192.2
–
192.2
–
Available-for-sale marketable securities
Government and agency debt securities
–
–
–
–
274.1
219.9
54.2
–
Corporate debt securities
–
–
–
–
291.0
5.6
285.4
–
Asset-backed and mortgage-backed securities
–
–
–
–
59.5
–
58.1
1.4
Total available-for-sale marketable securities
–
–
–
–
624.6
225.5
397.7
1.4
Foreign currency derivatives (2)
22.7
–
22.7
–
28.3
–
28.3
–
Total
$
57.6
$
–
$
57.6
$
–
$
845.1
$
225.5
$
618.2
$
1.4
Liabilities measured at fair value on a recurring basis:
Foreign currency derivatives (2)
$
11.9
$
–
$
11.9
$
–
$
11.8
$
–
$
11.8
$
–
Contingent consideration
1.0
–
–
1.0
–
–
–
–
Total
$
12.9
$
–
$
11.9
$
1.0
$
11.8
$
–
$
11.8
$
–
(1) Included in Cash and cash equivalents on the Consolidated Statements of Financial Position.
(2) Foreign currency derivative assets and foreign currency derivative liabilities are included in Prepaid expenses and other current assets and Accrued liabilities, respectively, on the Consolidated Statements of Financial
Position. Refer to Note 18 of the Notes to Consolidated Financial Statements for disclosure of derivative assets and liabilities on a gross basis.
The Company’s policy is to consider all highly liquid investments with an original maturity of three months or less at the Company’s
date of purchase to be cash equivalents. The amortized cost of these investments closely approximates fair value in accordance with