Audiovox 2010 Annual Report Download - page 59

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Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2010
(Dollars in thousands, except share and per share data)
e) Fair Value Measurements
The Company adopted authoritative guidance on “Fair Value Measurements”, as of March 1, 2008, which, among other
things, requires enhanced disclosures about investments that are measured and reported at fair value. This guidance
establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability used in
measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of
investment and the characteristics specific to the investment. Investments with readily available active quoted prices or
for which fair value can be measured from actively quoted prices generally will have a higher degree of market price
observability and a lesser degree of judgment used in measuring fair value.
Investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level 1 - Quoted market prices in active markets for identical assets or liabilities.
Level 2- Inputs other than Level 1 inputs that are either directly or indirectly observable.
Level 3- Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that
market participants would use.
The following table presents assets measured at fair value on a recurring basis at February 28, 2010:
Fair Value Measurements at Reporting Date
Using
Level 1 Level 2 Level 3
Cash and cash equivalents:
Cash and money market funds $ 69,511 $ 69,511 $ - $ -
Short-term investments
Foreign currency contract (a) $ 752 $ 752 $ - $ -
Long-term investment securities:
Marketable securities
Trading securities $ 3,158 $ 3,158 $ - $ -
Available-for-sale securities 3,821 94 - 3,727
Held-to-maturity 7,110 7,110 - -
Total marketable securities 14,089 10,362 - 3,727
Other investment at cost (b) 1,803 - - -
Total long-term investment securities $ 15,892 $ 10,362 $ - $ 3,727
The following table presents assets measured at fair value on a recurring basis at February 28, 2009:
Fair Value Measurements at Reporting Date
Using
Level 1 Level 2 Level 3
Cash and cash equivalents:
Cash and money market funds $ 69,504 $ 69,504 $ - $ -
Long-term investment securities:
Marketable Securities
Trading securities $ 2,543 $ 2,543 $ - $ -
Available-for-sale securities 3,727 312 - 3,415
Total marketable securities 6,270 2,855 - 3,415
Other long-term investments 1,474 - - -
Total long-term investment securities $ 7,744 $ 2,855 $ - $ 3,415
(a) The foreign currency contract is recorded in prepaid expenses and other current assets on the Company’s balance
sheet.
(b) There were no events or changes in circumstances that occurred to indicate a significant adverse effect on the cost of
this investment.
38
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠