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Fair Value Measurements
3 Months Ended
Jun. 18, 2011
Fair Value Measurements  
Fair Value, Measurement Inputs, Disclosure [Table Text Block]

Note 4 – Fair Value Measurements

 

ASC Topic 820 – Fair Value Measurement (“ASC 820”) defines fair value, establishes a framework for measuring fair value and expands disclosures about financial and non-financial assets and liabilities recorded at fair value.   It also applies under other accounting pronouncements that require or permit fair value measurements.  

 

The fair value hierarchy for disclosure of fair value measurements under ASC 820 is as follows:

Level 1:  Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:  Quoted prices, other than quoted prices included in Level 1, which are observable for the assets or liabilities, either directly or indirectly.

Level 3:  Inputs that are unobservable for the assets or liabilities.

 

Our outstanding interest rate swap agreements are classified within level 2 of the valuation hierarchy as readily observable market parameters are available to use as the basis of the fair value measurement.  As of June 18, 2011, we have recorded a fair value liability of $0.2 million in relation to our outstanding interest rate swap agreements as compared to $0.4 million as of January 1, 2011, which is included in accrued expenses on our Consolidated Balance Sheet.

 

Other Financial Assets and Liabilities

 

          Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable.  Financial liabilities with carrying values approximating fair value include accounts payable and outstanding checks. The carrying value of these financial assets and liabilities approximates fair value due to their short maturities.

 

The fair value of notes receivable approximates the carrying value at June 18, 2011 and January 1, 2011.  Substantially all notes receivable are based on floating interest rates which adjust to changes in market rates.

 

Long-term debt, which includes the current maturities of long-term debt, at June 18, 2011, had a carrying value and fair value of $300.0 million and $305.6 million, respectively, and at January 1, 2011, had a carrying value and fair value of $292.9 million and $305.6 million, respectively. The fair value is based on interest rates that are currently available to us for issuance of debt with similar terms and remaining maturities.

 

We account for the impairment of long-lived assets in accordance with ASC Topic 360 – Property, Plant, and Equipment.  During each of the second quarters 2011 and 2010, asset impairments of $0.3 million were recognized.  For year-to-date 2011 and 2010, asset impairments were $0.3 million and $0.8 million, respectively.  We utilize a discounted cash flow model that incorporates unobservable level 3 inputs to test for long-lived asset impairment.