Audiovox 2010 Annual Report Download - page 126

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Audiovox Specialized Applications, LLC And Subsidiary
(A Limited Liability Company)
Notes To Financial Statements
Note 2. Fair Value Measurements
On December 1, 2008, the Company adopted the new accounting standards that define fair value, establish a framework for measuring
fair value in accordance with GAAP, and expands disclosures about fair value measurements.
Accounting standards specify a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect
assumptions other market participants would use based upon market data obtained from independent sources (observable inputs), or
reflect the Company’s own assumptions of market participant valuation (unobservable inputs). In accordance with the accounting
standards, these two types of inputs have created the following fair value hierarchy:
Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted
assets or liabilities
Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and
liabilities in active markets or financial instruments for which significant inputs are observable, either directly or
indirectly.
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
The standard requires the use of observable market data if such data is available without undue cost and effort. The following is a
description of the valuation methodologies used for instruments measured at fair value:
Cash and cash equivalents, accounts receivable, accounts payable:
The carrying amounts approximate fair value due to the short maturity of those instruments.
Investments in available-for-sale securities:
The fair values of the investments in available-for-sale securities are estimated based on quoted market prices.
Note 3. Available-For-Sale Securities
The following is a summary of the Company's investment securities as of November 30, 2009 and 2008:
2009
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Government bonds $8,005,000 $ - $ - $8,005,000
2008
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Government bonds $3,995,000 $ - $ - $3,995,000
13
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠