Pandora 2012 Annual Report Download - page 87

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Table of Contents
Pandora Media, Inc.
Notes to Consolidated Financial Statements - Continued
Property and Equipment
Property and equipment consisted of the following:
As of January 31,
2011 2012
(in thousands)
Servers, computers, and other related equipment $ 7,695 $ 15,313
Office furniture and equipment 983 1,411
Leasehold improvements 2,710 5,356
11,388 22,080
Less accumulated depreciation and amortization (2,705) (6,504)
Property and equipment, net $ 8,683 $ 15,576
Depreciation and amortization expenses totaled $1.1 million, $1.6 million, and $4.5 million for the years ended January 31, 2010, 2011 and 2012,
respectively. The Company wrote off net assets due to asset retirement totaling $0.3 million for the fiscal year ended January 31, 2012. There were no
materials write-offs during the fiscal years ended January 31, 2010 and 2011.
4. Fair Value
The Company records cash equivalents, short-term investments and its preferred stock warrant liability at fair value.
Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly
transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market
participants would use in pricing an asset or liability. Fair value measurements are required to be disclosed by level within the following fair value hierarchy:
Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation
with market data at the measurement date and for the duration of the instrument's anticipated life.
Level 3 – Inputs lack observable market data to corroborate management's estimate of what market participants would use in pricing the asset or
liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
When determining fair value, whenever possible the Company uses observable market data, and relies on unobservable inputs only when observable
market data is not available.
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