Ross 2011 Annual Report Download - page 45

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43
Note B: Investments and Restricted Investments
The amortized cost and fair value of the Company’s available-for-sale securities as of January 28, 2012 were:
Amortized Unrealized Unrealized Fair Short- Long-
($000) cost gains losses value term term
Investments
Corporate securities $ 5,080 $ 501 $ (78) $ 5,503 $ 401 $ 5,102
Mortgage-backed securities 728 29 — 757 257 500
Total investments 5,808 530 (78) 6,260 658 5,602
Restricted Investments
Corporate securities 1,357 94 — 1,451 — 1,451
U.S. government and agency securities 3,769 431 — 4,200 — 4,200
Total restricted investments 5,126 525 — 5,651 — 5,651
Total $ 10,934 $ 1,055 $ (78) $ 11,911 $ 658 $ 11,253
The amortized cost and fair value of the Company’s available-for-sale securities as of January 29, 2011 were:
Amortized Unrealized Unrealized Fair Short- Long-
($000) cost gains losses value term term
Corporate securities $ 7,465 $ 634 $ (37) $ 8,062 $ 300 $ 7,762
U.S. government and agency securities 7,959 77 (5) 8,031 2,366 5,665
Mortgage-backed securities 1,111 82 — 1,193 538 655
Total $ 16,535 $ 793 $ (42) $ 17,286 $ 3,204 $ 14,082
Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the
inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active
markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own
assumptions.
This fair value hierarchy also requires the Company to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. Corporate, U.S. government and agency, and mortgage-backed securities are
classified within Level 1 or Level 2 because these securities are valued using quoted market prices or alternative pricing sources
and models utilizing market observable inputs.