Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the use of various valuation methodologies, including market, income and cost approaches are permissible. The inputs to these methodologies consider market comparable information, taking into account the principal or most advantageous market in which we would transact, when pricing the asset or liability.

The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels. We have categorized our cash equivalents, investments and derivatives within the fair value hierarchy as follows:

Level 2 – applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 – applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The following tables show, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis as of August 31, 2023 and 2022. We did not have any transfers between levels of fair value measurements during fiscal 2023 and 2022.


(in thousands)	Fair Value Measurements at August 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Money market funds(1)	$	137,125	$	—	$	—	$	137,125
Mutual funds(2)	—		32,210		—		32,210

Derivative instruments(3)	—		4,383		—		4,383
Total assets measured at fair value	$	137,125	$	36,593	$	—	$	173,718

Liabilities
Derivative instruments(3)	$	—	$	608	$	—	$	608
Contingent liability(4)	—		—		8,008		8,008
Total liabilities measured at fair value	$	—	$	608	$	8,008	$	8,616


(in thousands)	Fair Value Measurements at August 31, 2022
	Level 1		Level 2		Level 3		Total
Assets
Money market funds(1)	$	179,330	$	—	$	—	$	179,330
Mutual funds(2)	—		33,219		—		33,219

Derivative instruments(3)	—		12,412		—		12,412
Total assets measured at fair value	$	179,330	$	45,631	$	—	$	224,961

Liabilities
Derivative instruments(3)	$	—	$	8,307	$	—	$	8,307
Total liabilities measured at fair value	$	—	$	8,307	$	—	$	8,307

(1) Our money market funds are readily convertible into cash and the net asset value of each fund on the last day of the reporting period is used to determine its fair value. Our money market funds are included in Cash and cash equivalents within the Consolidated Balance Sheets.

(2) Our mutual funds' fair value is based on the fair value of the underlying investments held by the mutual funds, allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments is based on observable inputs. Our mutual funds are included in Investments within the Consolidated Balance Sheets.

(3) Our derivative instruments include our foreign exchange forward contracts and interest rate swap agreements. We utilize the income approach to measure fair value for our foreign exchange forward contracts. The income approach uses pricing models that rely on market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads. To estimate fair value for our interest rate swap agreements, we utilize a present value of future cash flows, leveraging a model-derived valuation that uses observable inputs such as interest rate yield curves. Refer to Note 5, Derivative Instruments for more information on our derivative instruments and their classification within the Consolidated Balance Sheets.

(4) The contingent liability resulted from the acquisition of a business during fiscal 2023. This liability reflects the present value of potential future payments that are contingent upon the achievement of certain specified milestones. The acquisition date fair value of the contingent liability was $7.9 million and was valued using a scenario-based method. This method incorporates unobservable inputs and assumptions made by management, including the probability of achieving specified milestones, expected time until payment and the discount rate. The fair value of the contingent liability is remeasured each reporting period until the contingency is resolved, with any changes in fair value recorded in SG&A in the Consolidated Statements of Income. The change in the fair value of the contingent liability from the acquisition date through August 31, 2023 was driven by the passage of time, with no changes made to key assumptions used in our fair value estimates.

Assets that are measured at fair value on a non-recurring basis primarily relate to our tangible fixed assets, lease ROU assets, goodwill and intangible assets. The fair values of these non-financial assets are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable information, and discounted cash flow projections. These non-financial assets are required to be assessed for impairment whenever events or circumstances indicate their carrying value may not be fully recoverable, and at least annually for goodwill.

Asset impairments in the Consolidated Statements of Income were $25.9 million and $64.3 million during fiscal 2023 and 2022, respectively, to reflect the difference between the fair market value and carrying value of certain assets. These impairments were mainly driven by an $18.0 million and $62.2 million charge during fiscal 2023 and 2022, respectively, related to our lease ROU assets and PPE. These charges were associated with vacating certain leased office space to resize our real estate footprint for the hybrid work environment. For those locations we anticipated subleasing, we estimated the fair value of the lease ROU assets as of the cease use date, using a market approach, based on expected future cash flows from sublease income. To complete this assessment we relied on certain assumptions, which included estimates of the rental rate, period of vacancy, incentives and annual rent increases.

As there were no expected future cash flows associated with lease ROU assets for locations we will not sublease nor PPE associated with the related vacated leased office space, we determined these assets had no remaining fair value and were fully impaired. Due to the subjective nature of the unobservable inputs used, the fair value measurement for the asset impairments are classified within Level 3 of the fair value hierarchy.

The remaining asset impairments for fiscal 2023 and 2022 were $7.9 million related to impairment of Developed technology and Trade names and $2.1 million related to Developed technology, respectively.

We elected not to carry our Long-term debt on the Consolidated Balance Sheets at fair value. The carrying value of our Long-term debt is net of related unamortized discounts and debt issuance costs.

Our Senior Notes are publicly traded; therefore, the fair value of our Senior Notes is estimated based on quoted prices in active markets as of the reporting date, which are considered Level 1 inputs. The fair value of our 2022 Credit Facilities is estimated based on quoted market prices for similar instruments, adjusted for unobservable inputs to ensure comparability to our investment rating, maturity terms and principal outstanding, which are considered Level 3 inputs. Refer to Note 12, Debt for definitions of these terms and more information on the Senior Notes and 2022 Credit Facilities.


		August 31, 2023				August 31, 2022
(in thousands)	Fair Value Hierarchy	Principal Amount		Estimated Fair Value		Principal Amount		Estimated Fair Value
2027 Notes	Level 1	$	500,000	$	460,890	$	500,000	$	470,525
2032 Notes	Level 1	500,000		423,700		500,000		438,205
2022 Term Facility	Level 3	375,000		376,406		750,000		750,975
2022 Revolving Facility	Level 3	250,000		246,875		250,000		249,075
Total principal amount		$	1,625,000	$	1,507,871	$	2,000,000	$	1,908,780
Total unamortized discounts and debt issuance costs		(12,300)				(17,576)
Total net carrying value of debt		$	1,612,700			$	1,982,424