Fair Value Measurements

3 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We measure fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a three tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets and liabilities; Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities or prices quoted in inactive markets; and Level 3, defined as unobservable inputs that are significant to the fair value of the asset or liability, and for which little or no market data exists, therefore requiring management to utilize its own assumptions to provide its best estimate of what market participants would use in valuing the asset or liability.

We did not have any material financial assets or liabilities measured at fair value on a recurring basis using Level 3 inputs as of June 30, 2022 or March 31, 2022. Our non-financial assets, such as goodwill, intangible assets and property and equipment, are measured at fair value on a nonrecurring basis, generally when there is a transaction involving those assets such as a purchase transaction, a business combination or an adjustment for impairment. No non-financial assets were measured at fair value at June 30, 2022 and March 31, 2022. As a result of the re-organization completed in April 2021, the Company reallocated goodwill to the three new reporting units discussed in Note 10, Business Segments. The contingent consideration representing Level 3 fair value measurement was prepared using the following assumptions:

Assumptions
Risk free rate	0.14%
Counter party risk premium	8.20%
Revenue WACC	5.10%
Revenue volatility	25.00%

The following tables present the Company’s financial assets that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy:

	As of June 30, 2022
	(In thousands)
	Amortized Cost		Gross Unrealized Loss		Gross Unrealized Gain		Estimated Fair Value
Assets:
Level 1:
Money market funds	$	1,280	$	—	$	—	$	1,280
Securities held in deferred compensation plan (1)	1,099		(142)		75		1,032
Subtotal	2,379		(142)		75		2,312
Level 2:
US Treasuries	2,400		—		—		2,400
Subtotal	2,400		—		—		2,400
Total	$	4,779	$	(142)	$	75	$	4,712
Liabilities:
Level 1:
Deferred compensation plan liabilities (2)	$	1,102	$	(146)	$	82	$	1,038
Subtotal	1,102		(146)		82		1,038
Level 3:
Contingent consideration (3)	255		—		—		255
Subtotal	255		—		—		255
Total	$	1,357	$	(146)	$	82	$	1,293

	As of March 31, 2022
	(In thousands)
	Amortized Cost		Gross Unrealized Loss		Gross Unrealized Gain		Estimated Fair Value
Assets:
Level 1:
Money market funds	$	71	$	—	$	—	$	71
Securities held in deferred compensation plan (1)	998		(106)		73		965
Subtotal	1,069		(106)		73		1,036
Level 2:
Commercial paper	7,499		—		—		7,499
US Treasuries	7,798		—		—		7,798
Subtotal	15,297		—		—		15,297
Total	$	16,366	$	(106)	$	73	$	16,333
Liabilities:
Level 1:
Deferred compensation plan liabilities (2)	$	1,013	$	(106)	$	72	$	979
Subtotal	1,013		(106)		72		979
Level 3:
Contingent consideration (3)	600		—		—		600
Subtotal	600		—		—		600
Total	$	1,613	$	(106)	$	72	$	1,579

(1) Included in prepaid expenses and other current assets on the Company’s balance sheet.

(2) Included in accrued payroll and related expenses on the Company’s balance sheet.

(3) Included short-term portion in accrued liabilities and long-term portion in other long-term liabilities on the Company’s balance sheet. As of June 30, 2022, the balance of contingent consideration was all short-term and included in accrued liabilities on the Company's balance sheet.

Unrealized losses related to investments are due to interest rate fluctuations as opposed to credit quality. In addition, we do not intend to sell, and it is not more likely than not that, we would be required to sell, any of our investments before recovery of their cost basis. As a result, there is no other-than-temporary impairment for these investments as of June 30, 2022.