Financial Instruments Accounts Receivable Other Receivables Inventory The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the immediate or short-term maturity of these financial instruments. The carrying amount reported for bonds payable was $46.5 million, compared to an estimated fair value of $45.4 million, based on a debt security with a comparable interest rate and maturity and a Standard & Poor’s credit rating of A-. Investments with contractual maturities beyond one year, such as our municipal variable rate demand notes, may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of  cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely  buy and sell these securities and we believe we have the ability to quickly sell them to the remarketing agent, tender agent, or  issuer at par value plus accrued interest in the event we decide to liquidate our investment in a particular variable rate demand  note. All income generated from these investments was recorded as interest income. We have not been required to record any  losses relating to municipal variable rate demand notes. Long-term investments represent a restricted certificate of deposit held at cost, municipal fixed-rate bonds, corporate  bonds, a fixed income bond fund, marketable equity securities, and other equity investments. Marketable equity securities  are reported at fair value as determined by the most recently traded price of the securities at the balance sheet date, although  the securities may not be readily marketable due to the size of the available market. Unrealized gains and losses, net of tax,  are reported as a separate component of stockholders’ equity. Realized gains and losses on sales of securities are computed  under the specific identification method and are included in current income. We periodically review our investment portfolio  for investments considered to have sustained an other-than-temporary decline in value. Impairment charges for other-than- temporary declines in value are recorded as realized losses in the accompanying consolidated statements of income. All of our  investments at December 31, 2013 and 2012 are classified as available-for-sale securities. See Note 4 of Notes to Consolidated  Financial Statements for additional information. We record accounts receivable at net realizable value. Prior to issuing payment terms to a new customer, we perform a detailed credit review of the customer. Credit limits are established for each new customer based on the results of this credit  review. Payment terms are established for each new customer, and collection experience is reviewed periodically in order  to determine if the customer’s payment terms and credit limits need to be revised. At December 31, 2013, one customer  accounted for 13.1% of our total accounts receivable. At December 31, 2012, one customer accounted for 10.4% of our total  accounts receivable. We maintain an allowance for doubtful accounts for losses resulting from the inability of our customers to make required payments. We regularly review the allowance for doubtful accounts and consider factors such as the age of accounts  receivable balances, the current economic conditions that may affect a customer’s ability to pay, significant one-time events  and our historical experience. If the financial condition of a customer deteriorates, resulting in an impairment of their ability  to make payments, we may be required to record an allowance for doubtful accounts. If circumstances change with regard to  individual receivable balances that have previously been determined to be uncollectible (and for which a specific reserve has  been established), a reduction in our allowance for doubtful accounts may be required. Our allowance for doubtful accounts  was $130 thousand at December 31, 2013 and $6 thousand at December 31, 2012. Other receivables are comprised primarily of amounts due from subcontract manufacturers for product component transfers, accrued interest on investments and on a restricted certificate of deposit, and amounts due from employee stock option exercises. At December 31, 2013 and 2012, other receivables also included an estimated receivable due from NSN  related to working capital adjustments that are currently under negotiation. Inventory is carried at the lower of cost or market, with cost being determined using the first-in, first-out method. Standard  costs for material, labor and manufacturing overhead are used to value inventory. Standard costs are updated at least quarterly;  therefore, inventory costs approximate actual costs at the end of each reporting period. We establish reserves for estimated  excess, obsolete or unmarketable inventory equal to the difference between the cost of the inventory and the estimated fair  value of the inventory based upon assumptions about future demand and market conditions. When we dispose of excess and  obsolete inventories, the related write-downs are charged against the inventory reserve. See Note 6 of Notes to Consolidated  Financial Statements for additional information. Financial Results 41