AVII » Topics » Fair Value of Financial Instruments.

This excerpt taken from the AVII 10-Q filed Aug 11, 2008.
Fair Value of Financial Instruments. The Company measures at fair value certain financial assets and liabilities, including cash equivalents. SFAS No. 157, “Fair Value Measurements” (SFAS No. 157) specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy:

 

Level 1—Quoted prices for identical instruments in active markets;

 

Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

 

Level 3—Valuations derived from valuation techniques in which one or more significant value drivers are unobservable.

 

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Table of Contents

 

 

 

Fair Value Measurement as of June 30, 2008

 

 

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Cash and cash equivalents

 

$

18,509,474

 

$

18,509,474

 

 

 

Short-term securities—available-for-sale

 

276,618

 

276,618

 

 

 

Total

 

$

18,786,092

 

$

18,786,092

 

 

 

 

The Company has deferred the adoption of SFAS No. 157 with respect to nonfinancial assets and liabilities in accordance with the provisions of FSP FAS 157-2, “Effective Date of FASB Statement No. 157.” Items in this classification include intangible assets and certain other items.

 

The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and other current monetary assets and liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments.

 

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