Overstock.com 2010 Annual Report Download - page 100
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Table of Contents
Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
2. ACCOUNTING POLICIES (Continued)
The fair value of these financial instruments was determined using the following levels of inputs as of December 31, 2009 (in thousands):
Fair Value Measurements at December 31, 2009:
Total Level 1 Level 2 Level 3
Assets:
Cash equivalents and restricted cash—Money market mutual funds $ 133,583 $ 133,583 $ — $ —
Liabilities:
Restructuring accrual(2) $ 2,685 $ — $ — $ 2,685
—Trading securities held in a rabbi trust are included in Other long-term assets in the consolidated balance sheets (Note 19—Employee
Retirement Plan).
—The fair value was determined based on the income approach, in which we used internal cash flow projections over the life of the
underlying lease agreements discounted based on a credit adjusted risk-free rate of return. See the roll forward related to the
restructuring accrual at Note 3—Restructuring Expense.
—Non Qualified deferred compensation for rabbi trust is included in Other long-term liabilities in the consolidated balances sheets
(Note 19—Employee Retirement Plan).
(1)
(2)
(3)
The estimated fair value of our 3.75% Convertible Senior Notes due 2011 ("Senior Notes") outstanding at December 31, 2010 and 2009 was
$33.2 million on a carrying value of $34.5 million and $53.6 million on a carrying value of $59.5 million, respectively. The fair value of the Senior Notes is a
Level 2 fair value estimate as it was derived using a convertible debt pricing model with observable market inputs, which include stock price, dividend
payments, borrowing costs, equity volatility, interest rates and interest spread.
Restricted investments
In December 2009, we implemented a Non Qualified Deferred Compensation Plan (the "NQDC Plan") for senior management (Note 19). Deferred
compensation amounts are invested in mutual funds held in a "rabbi trust" and are restricted for payment to the participants of the NQDC Plan. We account
for our investments held in the trust in accordance with Accounting Standards Codification ("ASC") No. 320 "Investments—Debt and Equity Securities". The
investments held in the trust are classified as trading securities. The fair value of the investments held in the trust totaled $148,000 at December 31, 2010 and
are included in Other long-term assets in the consolidated balance sheets. Our gains and losses on these investments were immaterial for the years ended
December 31, 2010.
Accounts receivable
Accounts receivable consist primarily of trade amounts due from customers and from uncleared credit card transactions at period end. Accounts
receivable are recorded at invoiced amounts and do not bear interest.
F-11