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Fair Value of Financial Instruments
6 Months Ended
Feb. 23, 2019
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
Fair Value of Financial Instruments

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. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

Level 1 – Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 – Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The following table sets forth the Company’s liabilities measured at fair value.

Fair value at August 25, 2018 is summarized as follows:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
Liabilities
 
 
 
 
 
 
 
 
TRA liability
 
$

 
$

 
$
27,468

 
$
27,468



A gain of $3.7 million was charged to the Loss (gain) in fair value change of contingent consideration - TRA liability for the thirteen weeks ended February 24, 2018 primarily due to the impacts of the change in tax law. A loss of $0.5 million and a gain of $3.0 million were charged to the Loss (gain) in fair value change of contingent consideration - TRA liability for the twenty-six weeks ended February 23, 2019 and February 24, 2018, respectively. The Company settled the Income Tax Receivable Agreement (the "TRA") during the twenty-six weeks ended February 23, 2019, which resulted in a $1.5 million gain. Following the settlement of the TRA liability, the Company did not have any Level 3 financial assets or liabilities. The settlement of the TRA liability is discussed in Note 7.

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximated fair value as of February 23, 2019 and August 25, 2018 due to the relatively short maturity of these instruments.