Chegg 2013 Annual Report Download - page 127

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CHEGG, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The amortized cost and fair value of available-for-sale investments as of December 31, 2013 by contractual
maturity were as follows (in thousands):
Cost Fair Value
Due in 1 year or less ......................... $ 38,571 $ 38,571
Due in 1-2 years ............................ 24,338 24,320
Investments not due at a single maturity date ...... 42,042 42,042
Total ......................................... $104,951 $104,933
Investments not due at a single maturity date in the preceding table consist of money market fund deposits.
As of December 31, 2013, we considered the declines in market value of our investment portfolio to be
temporary in nature and did not consider any of our investments other-than-temporarily impaired. We typically
invest in highly-rated securities with a minimum credit rating of A- and a weighted average maturity of six
months, and our investment policy generally limits the amount of credit exposure to any one issuer. The policy
requires investments generally to be investment grade, with the primary objective of preserving capital and
maintaining liquidity. Fair values were determined for each individual security in the investment portfolio. When
evaluating an investment for other-than-temporary impairment, we review factors such as the length of time and
extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes
thereto, changes in market interest rates, and our intent to sell, or whether it is more likely than not it will be
required to sell, the investment before recovery of the investment’s cost basis. During 2013, we did not recognize
any impairment charges.
Note 4. Fair Value Measurement
We have established a fair value hierarchy used to determine the fair value of our financial instruments as
follows:
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are
observable for the assets or liabilities, either directly or indirectly through market corroboration, for
substantially the full term of the financial instruments.
Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and
liabilities at fair value; the inputs require significant management judgment or estimation.
A financial instrument’s classification within the fair value hierarchy is based on the lowest level of any
input that is significant to the fair value measurement.
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