FAIR VALUE MEASURES

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 is permissible. The Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

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 of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and

may

affect their placement within the fair value hierarchy levels. FactSet has categorized its cash equivalents, investments and derivatives within the fair value hierarchy as follows:

Level

- applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. These Level

assets and liabilities include FactSet’s corporate money market funds that are classified as cash equivalents.

Level

- 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. The Company’s certificates of deposit and derivative instruments are classified as Level

Level

- 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. There were

Level

assets or liabilities held by FactSet as of

August 31, 2018

2017.

(

) Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables shows by level within the fair value hierarchy the Company’s assets and liabilities that are measured at fair value on a recurring basis at

August 31, 2018

and

2017:

	Fair Value Measurements at August 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Corporate money market funds (1)	$	75	$	—	$	—	$	75
Mutual Funds (2)		—		18,668		—		18,668
Certificates of deposit (3 )		—		10,591		—		10,591
Derivative instruments (4 )		—		90		—		90
Total assets measured at fair value	$	75	$	29,349	$	—	$	29,424

Liabilities
Derivative instruments ( 4 )	$	—	$	4,036	$	—	$	4,036
Total liabilities measured at fair value	$	—	$	4,036	$	—	$	4,036

	Fair Value Measurements at August 31, 2017
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Corporate money market funds (1)	$	26,677	$	—	$	—	$	26,677
Mutual Funds (2)		—		18,364		—		18,364
Certificates of deposit ( 3 )		—		14,080		—		14,080
Derivative instruments ( 4 )		—		6,142		—		6,142
Total assets measured at fair value	$	26,677	$	38,586	$	—	$	65,263

Liabilities
Derivative instruments ( 4 )	$	—	$	—	$	—	$	—
Total liabilities measured at fair value	$	—	$	—	$	—	$	—

(

)

The Company’s corporate money market funds

are

readily convertible into cash

and the net asset value of each fund on the last day of the quarter is used to determine its fair value. As such, the Company’s corporate money market funds are classif

ied as Level

and included in C

ash and cash equi

valents within

the Consolidated B

alance

heet

(

)

The Company’s mutual funds have a fair value 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. As such, the Company’s mutual funds are classified as Level

and are classified as

nvestments (short-term) on the Consolidated Balance Sheets.

(

)

The Company’s c

ertificates of deposit held for investment are

not

debt securities

and are classified as Level

. These certificates of deposit have original maturities greater than

three

months, but less than

one

year a

nd, as such, are classified as I

nvestments (short-term

) within

the

Consolidated Balance Sheets

(

)

The Company utilizes the income approach to measure fair value for its derivative instruments (

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

and therefore are classified as Level

The Company did

not

have any transfers between Level

and Level

fair value measurements during the periods presented.

(

) Assets and Liabilities Measured at Fair Value on a Non-

Recurring

Basis

Certain assets, including goodwill and intangible assets, and liabilities, are measured at fair value on a non-recurring basis; that is, the assets and liabilities are

not

measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances such as when they are deemed to be other-than-temporarily impaired. The fair values of these non-financial assets and liabilities are determined based on valuation techniques using the best information available, and

may

include quoted market prices, market comparable, and discounted cash flow projections. An impairment charge is recorded when the cost exceeds its fair value, based upon the results of such valuations. During fiscal

2018

and

2017,

fair value adjustments or material fair value measurements were required for the Company’s non-financial assets or liabilities.

As of

August 31, 2018,

and

2017,

the fair value of the Company’s long-term debt was

$575.0

million, which approximated its carrying amount given its floating interest rate basis. The fair value of the Company’s long-term debt was determined based on quoted market prices for debt with a similar maturity, and thus categorized as Level

in the fair value hierarchy.