MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS

Marketable Securities

As of December 31, 2019 and December 31, 2018, all of our marketable securities are classified as available-for-sale and consist of the following:



	Cost		Unrealized Gain (Loss)			Fair Value
Short-term marketable securities:
As of December 31, 2019:
Commercial paper	$	2,487	$	—		$	2,487
U.S. government treasury bills	2,249		1			2,250
Corporate debt securities	2,236		2			2,238
	$	6,972	$	3		$	6,975

As of December 31, 2018:
Corporate debt securities	$	3,238	$	(2	)	$	3,236
U.S. government treasury bills	1,841		—			1,841
Commercial paper	992		—			992
	$	6,071	$	(2	)	$	6,069

Unrealized holding gains and losses are recorded in accumulated other comprehensive income, a component of shareholders’ equity, in the condensed consolidated balance sheets.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Three levels of inputs may be used to measure fair value:


Level 1:	Valuations based on quoted prices in active markets for identical assets and liabilities.


Level 2:	Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.


Level 3:	Valuations based on unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions.

The following table presents information about our assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets as of December 31, 2019 and 2018:



	Level 1		Level 2		Level 3		Total
As of December 31, 2019:
Assets:
Cash equivalents:
Money market funds	$	1,307	$	—	$	—	$	1,307
Short-term marketable securities:
U.S. government treasury bills	2,250		—		—		2,250
Commercial paper	—		2,487		—		2,487
Corporate debt securities	—		2,238		—		2,238

As of December 31, 2018:
Assets:
Cash equivalents:
Money market funds	$	13,388	$	—	$	—	13,388
Commercial paper	—		250		—		250
Corporate debt securities	—		249		—		249
Short-term marketable securities:
U.S. government treasury bills	1,841		—		—		1,841
Corporate debt securities	—		3,236		—		3,236
Commercial paper	—		992		—		992

We primarily use the market approach to determine the fair value of our financial instruments. The fair value of our current assets and liabilities, including accounts receivable and accounts payable approximates the carrying value due to the short-term nature of these balances. We have currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with U.S. GAAP.

Historical Timeline

Fiscal Year	Filed
2019	Mar 11, 2020	Showing above
2018	Mar 13, 2019

2017	Mar 14, 2018

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

PIXELWORKS, INC Fair Value Disclosure

Historical Timeline

About Fair Value Disclosures

Other Available Disclosures