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Fair Value Measurements
12 Months Ended
Oct. 31, 2012
Fair Value Measurements [Abstract]  
Fair Value Measurements

4. Fair Value Measurements

 

Under the FASB ASC 820, Fair Value Measurements and Disclosures, a fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3).

 

The following table sets forth the Company's financial assets and liabilities as of October 31, 2012, that are measured on a recurring basis during the period, segregated by level within the fair value hierarchy:

 

    Level 1     Level 2     Level 3     Total  
Assets at fair value:                                
Available- for -sale securities   $ 15,701,000     $ -     $ -     $ 15,701,000  
Liabilities at fair value:                                
Derivatives   $ -     $ 3,840,000     $ -     $ 3,840,000  

 

Available-for-sale securities consist of marketable securities in Calavo Growers, Inc. common stock. The Company currently owns 665,000 shares, representing approximately 4.5% of Calavo's outstanding common stock. These securities are measured at fair value by quoted market prices. Calavo's stock price at October 31, 2012 and 2011 was $23.61 and $22.57 per share, respectively.

 

Derivatives consist of interest rate swaps (see Note 14) whose fair value is estimated using industry-standard valuation models. Such models project future cash flows and discount the future amounts to a present value using market-based observable inputs.