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Fair Value Measurement
9 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurement
(7) Fair Value Measurement
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1—Quoted prices in active markets for identical assets and liabilities.
Level 2—Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
The Company measures certain cash and cash equivalents, accounts receivable, accounts payable and client fund obligations at fair value on a recurring basis using Level 1 inputs. The Company considers the recorded value of these
financial assets and liabilities to approximate the fair value of the respective assets and liabilities at June 30, 2022 and March 31, 2023 based upon the short-term nature of these assets and liabilities.
Marketable securities, consisting of securities classified as available-for-sale as well as certain cash equivalents, are recorded at fair value on a recurring basis using Level 2 inputs obtained from an independent pricing service. Available-for-sale securities include commercial paper, corporate bonds, asset-backed securities, certificates of deposit, U.S. treasury securities, U.S. government agency and other securities. The independent pricing service utilizes a variety of inputs including benchmark yields, broker/dealer quoted prices, reported trades, issuer spreads as well as other available market data. The Company, on a sample basis, validates the pricing from the independent pricing service against another third-party pricing source for reasonableness. The Company has not adjusted any prices obtained by the independent pricing service, as it believes they are appropriately valued. There were no available-for-sale securities classified in Level 3 of the fair value hierarchy at June 30, 2022 or March 31, 2023.
The fair value level for the Company’s cash and cash equivalents and available-for-sale securities was as follows:
June 30, 2022
TotalLevel 1Level 2Level 3
Cash and cash equivalents$139,756$139,756$$
Funds held for clients' cash and cash equivalents3,653,6973,640,42713,270
Available-for-sale securities:
Commercial paper58,04058,040
Corporate bonds57,85357,853
Asset-backed securities9,7049,704
Certificates of deposit31,83631,836
U.S. treasury securities166,987166,987
U.S government agency securities7,5497,549
Other2,1102,110
Total available-for-sale securities334,079334,079
Total investments$4,127,532$3,780,183$347,349$
March 31, 2023
TotalLevel 1Level 2Level 3
Cash and cash equivalents$233,692$233,692$$
Funds held for clients' cash and cash equivalents2,605,1582,601,5783,580
Available-for-sale securities:
Commercial paper151,831151,831
Corporate bonds117,798117,798
Asset-backed securities28,90128,901
Certificates of deposit84,02784,027
U.S. treasury securities199,939199,939
U.S government agency securities7,5047,504
Other7,2577,257
Total available-for-sale securities597,257597,257
Total investments$3,436,107$2,835,270$600,837$
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis
The Company records assets acquired and liabilities assumed in business combinations at fair value. Refer to Note 4 for further details on the fair value measurements of certain assets and liabilities recorded at fair value on a non-recurring basis.