Note 10. Fair Value (Tables)

9 Months Ended

Mar. 31, 2019

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: Money market funds	1	Market - Quoted market prices
Cash Equivalents: Commercial paper	2	Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information.
Available-for-sale securities: Secondary market certificates of deposit	2	Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information.
Available-for-sale securities: Municipal bonds	2	Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information.
Available-for-sale securities: U.S. Treasury and federal agencies	2	Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information.
Trading securities: Mutual funds held in nonqualified SERP	1	Market - Quoted market prices
Derivative Assets: Stock warrants	3	Market - The privately-held company is currently in an early stage of start-up. The pricing of recent purchases or sales of the investment are considered, if any, as well as positive and negative qualitative evidence, in the assessment of fair value.
Derivative Liability: 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 International's non-performance risk.
Contingent earn-out liability	3	Income - Based on a valuation model that measures the present value of the probable cash payments based upon the forecasted operating performance of the acquisition and a discount rate that captures the risk associated with the liability.

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

As of March 31, 2019 and June 30, 2018, the fair values of financial assets that are measured at fair value on a recurring basis using the market approach are categorized as follows:



	March 31, 2019
(Amounts in Thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents: Money market funds	$	21,954	$	—	$	—	$	21,954
Cash equivalents: Commercial paper	—		25,055		—		25,055
Available-for-sale securities: Secondary market certificates of deposit	—		13,637		—		13,637
Available-for-sale securities: Municipal bonds	—		2,445		—		2,445
Available-for-sale securities: U.S. Treasury and federal agencies	—		25,739		—		25,739
Trading Securities: Mutual funds in nonqualified SERP	12,505		—		—		12,505
Derivatives: Stock warrants	—		—		1,500		1,500
Total assets at fair value	$	34,459	$	66,876	$	1,500	$	102,835
Liabilities
Contingent earn-out liability	—		—		156		156
Total liabilities at fair value	$	—	$	—	$	156	$	156

	June 30, 2018
(Amounts in Thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents: Money market funds	$	24,407	$	—	$	—	$	24,407
Cash equivalents: Commercial paper	—		25,918		—		25,918
Available-for-sale securities: Secondary market certificates of deposit	—		11,850		—		11,850
Available-for-sale securities: Municipal bonds	—		16,508		—		16,508
Available-for-sale securities: U.S. Treasury and federal agencies	—		6,249		—		6,249
Trading Securities: Mutual funds in nonqualified SERP	12,114		—		—		12,114
Derivatives: Stock warrants	—		—		1,500		1,500
Total assets at fair value	$	36,521	$	60,525	$	1,500	$	98,546
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	10	$	—	$	10
Contingent earn-out liability	—		—		1,056		1,056
Total liabilities at fair value	$	—	$	10	$	1,056	$	1,066

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

Financial instruments that are not reflected in the Condensed 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.
Equity securities without readily determinable fair value	3	Cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Impairment is assessed qualitatively.