Yahoo 2011 Annual Report Download - page 93

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valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to
unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
Basis of Fair Value Measurement
Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active
markets.
Level 2 Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices
for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for
the asset or the liability; or inputs that are derived principally from or corroborated by observable
market data by correlation or other means.
Level 3 Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques
used to determine fair value. These assumptions are required to be consistent with market participant
assumptions that are reasonably available.
The following table sets forth the financial assets, measured at fair value, by level within the fair value hierarchy
as of December 31, 2010 (in thousands):
Fair Value Measurements at Reporting Date Using
Assets Level 1 Level 2 Total
Money market funds(1) ................................... $291,268 $ — $ 291,268
Available-for-sale securities:
Government and agency securities(1) ..................... — 1,401,991 1,401,991
Municipal bonds(1) ................................... — 26,269 26,269
Commercial paper and bank certificates of deposit(1) ........ — 218,485 218,485
Corporate debt securities(1) ............................ — 576,378 576,378
Available-for-sale securities at fair value ............. $291,268 $2,223,123 $2,514,391
Corporate equity securities(2) .......................... 1,469 — 1,469
Total assets at fair value .......................... $292,737 $2,223,123 $2,515,860
(1) The money market funds, government and agency securities, municipal bonds, commercial paper and bank
certificates of deposit, and corporate debt securities are classified as part of either cash and cash equivalents
or investments in marketable debt securities in the consolidated balance sheet.
(2) The corporate equity securities are classified as part of the other long-term assets in the consolidated balance
sheet.
The amount of cash and cash equivalents as of December 31, 2010 includes $1.1 billion in cash deposited with
commercial banks, of which $425 million are time deposits.
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