Fair value measurements

6 Months Ended

Jun. 30, 2023

Funds held for customers and cash and cash equivalents included available-for-sale debt securities (Note 3). These securities included a mutual fund investment that invests in Canadian and provincial government securities and as of December 31, 2022, included a domestic money market fund. The mutual fund investment is not traded in an active market and its fair value is determined by obtaining quoted prices in active markets for the underlying securities held by the fund. The cost of the money market fund held as of December 31, 2022, which was traded in an active market, approximated its fair value because of the short-term nature of the investment. Unrealized gains and losses, net of tax, are included in accumulated other comprehensive loss on the consolidated balance sheets. The cost of securities sold is determined using the average cost method. Realized gains and losses are included in revenue on the consolidated statements of comprehensive income and were not material for the quarters or six months ended June 30, 2023 and 2022.

Information regarding the fair values of our financial instruments was as follows:


						Fair value measurements using
		June 30, 2023				Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
(in thousands)	Balance sheet location	Carrying value		Fair value
Measured at fair value through comprehensive income:
Available-for-sale debt securities	Funds held for customers	$	8,402	$	8,402	$	—	$	8,402	$	—
Derivative assets (Note 7)	Other non-current assets	9,015		9,015		—		9,015		—
Amortized cost:
Cash	Cash and cash equivalents	39,052		39,052		39,052		—		—
Cash	Funds held for customers	147,392		147,392		147,392		—		—
Cash	Other non-current assets	2,749		2,749		2,749		—		—
Loans and notes receivable from distributors	Other current assets and other non-current assets	13,752		12,754		—		—		12,754
Long-term debt	Current portion of long-term debt and long-term debt	1,667,210		1,575,872		—		1,575,872		—


						Fair value measurements using
		December 31, 2022				Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
(in thousands)	Balance sheet location	Carrying value		Fair value
Measured at fair value through comprehensive income:

Available-for-sale debt securities	Cash and cash equivalents	$	5,000	$	5,000	$	5,000	$	—	$	—
Available-for-sale debt securities	Funds held for customers	8,126		8,126		—		8,126		—
Derivative assets (Note 7)	Other current assets and other non-current assets	3,593		3,593		—		3,593		—
Amortized cost:
Cash	Cash and cash equivalents	35,435		35,435		35,435		—		—
Cash	Funds held for customers	294,165		294,165		294,165		—		—
Cash	Other non-current assets	2,815		2,815		2,815		—		—
Loans and notes receivable from distributors	Other current assets and other non-current assets	14,220		13,315		—		—		13,315
Long-term debt	Current portion of long-term debt and long-term debt	1,644,276		1,574,417		—		1,574,417		—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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