TeleNav 2014 Annual Report Download - page 91

Table of Contents TELENAV, INC.
Notes to Consolidated Financial Statements—(Continued)
Restricted cash
As of June 30, 2014 and June 30, 2013, we had restricted cash of $6.0 million and $2.7 million, respectively, on our consolidated balance
sheets. As of June 30, 2014, restricted cash is comprised primarily of a $6.0 million overpayment from a customer that will be refunded. In
January 2014, the $2.7 million of restricted cash held in escrow as of June 30, 2013 related to our acquisition of Thinknear was paid to
Thinknear stockholders.
Fair value of financial instruments
The estimated fair market value of financial instruments, including cash, accounts receivable, accounts payable and accrued expenses,
approximates the carrying values of those instruments due to their relatively short maturities.
We measure certain other financial instruments at fair value on a recurring basis. We have established a hierarchy, which consists of three
levels, for disclosure of the inputs used to determine the fair value of our financial instruments.
Level 1 valuations are based on quoted prices in active markets for identical assets or liabilities.
Level 2 valuations are based on inputs that are observable, either directly or indirectly, other than quoted prices included within Level 1.
Such inputs used in determining fair value for Level 2 valuations include quoted prices in active markets for similar assets or liabilities, quoted
prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the assets or liabilities.
Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement.
As of June 30, 2014 and 2013 , we did not have any Level 3 financial instruments.
Property and equipment
Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-
line
method over the estimated useful lives of the respective assets. Computers, software, automobiles and equipment have useful lives of three years
and fixtures and furniture have useful lives of five years. Leasehold improvements are amortized using the straight-line method over the shorter
of the estimated useful lives of the assets or the term of the related lease.
Long-term investments
Our long-term investments consist of privately-held investments, and are included in other assets in our consolidated balance sheets. As of
June 30, 2014, our investments in privately-held investments were $1.8 million . These investments are accounted for as cost-basis investments,
as we own less than 20% of the voting securities and do not have the ability to exercise significant influence over operating and financial policies
of the entities. Our investments are in entities that are not publicly traded and, therefore, no established market for the securities exists. Our cost-
method investments are carried at historical cost in our condensed consolidated balance sheets and measured at fair value on a nonrecurring basis
when indicators of impairment exist. If we believe that the carrying value of the cost basis investments is in excess of estimated fair value, our
policy is to record an impairment charge to adjust the carrying value to estimated fair value, when the impairment is deemed other-than-
temporary. We regularly evaluate the carrying value of these cost-method investments for impairment. We record realized gains or losses on the
sale or impairment of cost method investments in other income (expense), net. We recorded impairment charges of $250,000 , $335,000 and
$250,000 on certain non-marketable equity investments in fiscal 2014, 2013 and 2012, respectively.
Also included in other income (expense), net in fiscal 2014 is a $795,000 gain from the sale in December 2013 of an investment in a
privately-held company.
Long-lived assets
We evaluate our long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate the
carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the
future undiscounted cash flows the assets are expected to generate. If long-lived assets are considered to be impaired, the impairment to be
recognized equals the amount by which the carrying value of the asset exceeds its fair value.
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