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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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