SNDK » Topics » Cash Equivalents, Short and Long-Term Marketable Securities.

This excerpt taken from the SNDK 10-K filed Feb 25, 2010.
Cash Equivalents, Short and Long-Term Marketable Securities.  Cash equivalents consist of short-term, highly liquid financial instruments with insignificant interest rate risk that are readily convertible to cash and have maturities of three months or less from the date of purchase.  Marketable securities with original maturities greater than three months and remaining maturities less than one year are classified as short-term marketable securities.  Marketable securities with remaining maturities greater than one year as of the balance sheet date are classified as long-term marketable securities.  Short and long-term fixed income investments consist of commercial paper, United States (“U.S.”) treasuries, government agency and government-sponsored agency obligations, corporate/municipal notes and bonds, and variable rate demand notes.  Both short and long-term marketable securities also include investments in certain equity securities.  The fair market value, based on quoted market prices, of cash equivalents, and short and long-term marketable securities at January 3, 2010 approximated their carrying value.  Cost of securities sold is based on specific identification.

In determining if and when a decline in market value below cost of these investments is other-than-temporary, the Company evaluates both quantitative and qualitative information including the market conditions, offering prices, trends of earnings, price multiples and other key measures.  For equity securities, when such a decline in value is deemed to be other-than-temporary, the Company recognizes an impairment loss in the current period operating results to the extent of the decline.  For debt securities, only the decline in the credit rating element of an other-than-temporary impairment is taken to the Consolidated Statement of Operations, unless the Company intends, or more likely than not will be forced, to sell the security.
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Notes to Consolidated Financial Statements
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