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Fair value measurements
12 Months Ended
Apr. 03, 2021
Fair value measurements  
Fair value measurements

13. Fair value measurements

Under U.S. GAAP, the Company is required to a) measure certain assets and liabilities at fair value or b) disclose the fair values of certain assets and liabilities recorded at cost. Accounting standards define fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value is calculated assuming the transaction occurs in the principal or most advantageous market for the asset or liability and includes consideration of non-performance risk and credit risk of both parties. Accounting standards pertaining to fair value establish a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value. These tiers include:

Level 1—Valuation inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
Level 2—Valuation inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3—Valuation inputs are unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques.

As of April 3, 2021 and March 28, 2020, the Company held certain items that are required to be measured at fair value on a recurring basis. These items included foreign currency forward contracts which the Company uses to stabilize its retail gross margins and to protect its operations from downward currency exposure. These items also included the nonqualified retirement plan, which consists of investments purchased by employee contributions to retirement savings accounts. The fair value amount of the nonqualified retirement plan is measured using the net asset value per share practical expedient, and therefore, is not classified in the fair value hierarchy. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of contracts it holds.

The following items are measured at fair value on a recurring basis, subject to the disclosure requirements of ASC 820, Fair Value Measurements, at April 3, 2021 and March 28, 2020:

April 3,

March 28,

 

Description

    

    

Balance Sheet Location

    

2021

    

2020

 

Assets

Nonqualified retirement plan

 

N/A

 

Other current assets

$

5,707

$

5,066

Foreign currency forward contracts

 

Level 2

 

Other current assets

 

2,906

 

Total assets

$

8,613

$

5,066

The fair value of long-term debt was estimated using quoted prices as well as recent transactions for similar types of borrowing arrangements (level 2 valuations). As of April 3, 2021 and March 28, 2020, the estimated fair value of the Company’s long-term debt, including current maturities, was as follows:

April 3,

March 28,

    

2021

    

2020

Senior secured term loan facility

$

174,064

$

198,041

2019 Elfa revolving facilities

9,050

Obligations under finance leases

335

274

Revolving credit facility

 

 

78,000

Total fair value of debt

$

174,399

$

285,365