Natural Health Trends Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2018

Available-for-sale investments included in cash equivalents at the end of each period were as follows (in thousands):



	December 31, 2018							December 31, 2017
	Adjusted Cost		Gross Unrealized Gains/Losses			Fair Value		Adjusted Cost		Gross Unrealized Gains/Losses			Fair Value
Municipal bonds and notes	$	12,149	$	(7	)	$	12,142	$	13,320	$	(1	)	$	13,319
Corporate debt securities	51,862		(26		)	51,836		49,432		(24		)	49,408
Financial institution instruments	21,352		—			21,352		10,881		—			10,881
Total available-for-sale investments	$	85,363	$	(33	)	$	85,330	$	73,633	$	(25	)	$	73,608

Financial institution instruments include instruments issued or managed by financial institutions such as money market fund deposits and time deposits.

FASB Topic 820, Fair Value Measurements, establishes a fair value hierarchy that requires the use of observable market data, when available, and prioritizes the inputs to valuation techniques used to measure fair value in the following categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The tables below present the Company’s hierarchy for assets measured at fair value on a recurring basis as of December 31, 2018 and 2017.



	December 31, 2018
	Level 1		Level 2		Level 3		Total
Amounts included in cash and cash equivalents	$	85,330	$	—	$	—	$	85,330
Total assets measured at fair value on a recurring basis	$	85,330	$	—	$	—	$	85,330



	December 31, 2017
	Level 1		Level 2		Level 3		Total
Amounts included in cash and cash equivalents	$	73,608	$	—	$	—	$	73,608
Total assets measured at fair value on a recurring basis	$	73,608	$	—	$	—	$	73,608

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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