Logitech 2013 Annual Report Download - page 191

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
goodwill related to the Company’s video conferencing operating segment, investment in a privately-held company,
and goodwill, other intangibles and property, plant and equipment related to the digital video security product line
were measured at fair value on a non-recurring basis using the type of inputs shown (in thousands):
Fair
Value as of
March 31,
2013
Impairment
Charge
Year Ended
March 31,
2013
Level 3
Goodwill—Video Conferencing segment ....................................
$124,613 $ 214,500
Investment in privately-held company ...................................... 370 3,600
Goodwill, other intangibles and other assets—Digital Video
Security ........................................................... — 2,188
$124,983 $ 220,288
The fair value of the video conferencing goodwill was determined using a combination of an income approach
employing a discounted cash flow model and a market approach, which are considered to be Level 3 inputs. The fair
value of the investment in a privately-held company was determined using a liquidation value approach, which is
considered to be a Level 3 input. The fair value of the goodwill, other intangibles and property, plant and equipment
related to the digital video security product line were determined using a market approach, which is considered to
be a Level 3 input.
Cash and Cash Equivalents
Cash equivalents consist of bank demand deposits and time deposits. The time deposits have original
maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value.
Investment Securities
The Company’s investment securities portfolio consists of marketable securities (money market and mutual
funds) related to a deferred compensation plan at March 31, 2013. The Company’s investment securities portfolio
consists of marketable security related to a deferred compensation and auction rate securities collateralized by
residential and commercial mortgages at March 31, 2012.
The marketable securities related to the deferred compensation plan are classified as non-current other assets.
Since participants in the deferred compensation plan may select the mutual funds in which their compensation
deferrals are invested within the confines of the Rabbi Trust which holds the marketable securities, the Company
has designated these marketable securities as trading investments, although there is no intent to actively buy and
sell securities within the objective of generating profits on short-term differences in market prices. Management
has classified the investments as non-current assets because final sale of the investments or realization of proceeds
by plan participants is not expected within the Company’s normal operating cycle of one year. The marketable
securities are recorded at a fair value of $15.6 million and $14.3 million as of March 31, 2013 and 2012, based on
quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair
value hierarchy. Earnings, gains and losses on trading investments are included in other income (expense), net.
Unrealized trading gains of $0.5 million and $0.1 million are included in other income (expense), net for the fiscal
year ended March 31, 2013 and relate to trading securities held at March 31, 2013 and 2012.
Note 8 — Financial Instruments (Continued)
ANNUAL REPORT
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