Note 7. Fair Value (Tables)

3 Months Ended

Sep. 30, 2013

Fair Value Measurements, Recurring, Valuation Techniques

The following methods and assumptions were used to measure fair value:



Financial Instrument	Level	Valuation Technique/Inputs Used
Cash Equivalents	1	Market - Quoted market prices
Derivative Assets: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk.
Derivative Assets: Stock warrants	3	Market - Based on a probability-weighted Black-Scholes option pricing model with the following inputs (level 3 input values indicated in parenthesis): risk-free interest rate (0.09%), historical stock price volatility (98.5%) and weighted average expected term (6 months). Enterprise value was estimated using a discounted cash flow calculation. Stock warrants are revalued and analyzed for reasonableness on a quarterly basis. The level 3 inputs used are the standard inputs used in the Black-Scholes model. Input values are based on publicly available information (Federal Reserve interest rates) and internally-developed information (historical stock price volatility of comparable investments) and remaining expected term of warrants. Significant increases (decreases) in the historical stock price volatility, expected life, and enterprise value in isolation would result in a significantly higher (lower) fair value measurement. The inputs do not have any interrelationships.
Trading securities: Mutual funds held by nonqualified supplemental employee retirement plan	1	Market - Quoted market prices
Derivative Liabilities: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball's non-performance risk.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

As of September 30, 2013 and June 30, 2013, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:



	September 30, 2013
(Amounts in Thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	90,723	$	—	$	—	$	90,723
Derivatives: Foreign exchange contracts	—		145		—		145
Derivatives: Stock warrants	—		—		29		29
Trading Securities: Mutual funds held by nonqualified supplemental employee retirement plan	20,422		—		—		20,422
Total assets at fair value	$	111,145	$	145	$	29	$	111,319
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	1,637	$	—	$	1,637
Total liabilities at fair value	$	—	$	1,637	$	—	$	1,637

	June 30, 2013
(Amounts in Thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	83,516	$	—	$	—	$	83,516
Derivatives: Foreign exchange contracts	—		273		—		273
Derivatives: Stock warrants	—		—		25		25
Trading Securities: Mutual funds held by nonqualified supplemental employee retirement plan	19,600		—		—		19,600
Total assets at fair value	$	103,116	$	273	$	25	$	103,414
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	1,662	$	—	$	1,662
Total liabilities at fair value	$	—	$	1,662	$	—	$	1,662

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques



Non-recurring fair value adjustment	Level	Valuation Technique/Inputs Used
Impairment of long-lived assets (property & equipment)	3	Market - Estimated potential net selling price.

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following:



Financial Instrument	Level	Valuation Technique/Inputs Used
Notes receivable	2	Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer's non-performance risk
Non-marketable equity securities (cost-method investments, which carry shares at cost except in the event of impairment)	3	Cost Method, with Impairment Recognized Using a Market-Based Valuation Technique - See the explanation below the table regarding the method used to periodically estimate the fair value of cost-method investments.
Long-term debt (carried at amortized cost)	3	Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball's non-performance risk