Note 3 - Fair Value Measurements

9 Months Ended

Dec. 25, 2011

Fair Value Disclosures [Text Block]

NOTE C – FAIR VALUE MEASUREMENTS

Nathan’s follows a three-level fair value hierarchy that prioritizes the inputs to measure fair value. This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.” The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

·    Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market

·    Level 2 - inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market, quoted prices in markets that are not active, or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability

·    Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability

The following tables present assets and liabilities measured at fair value on a recurring basis as of December 25, 2011 and March 27, 2011 based upon the valuation hierarchy (in thousands):

December 25, 2011	Level 1		Level 2		Level 3		Carrying Value
Marketable securities	$	-	$	15,800	$	-	$	15,800
Total assets at fair value	$	-	$	15,800	$	-	$	15,800

March 27, 2011	Level 1		Level 2		Level 3		Carrying Value
Marketable securities	$	-	$	18,906	$	-	$	18,906
Total assets at fair value	$	-	$	18,906	$	-	$	18,906

Nathan’s marketable securities, which consist primarily of municipal bonds, are not actively traded.  The valuation of such bonds is based upon quoted market prices for similar bonds currently trading in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset.

The carrying amounts of cash equivalents, note receivable held for sale, accounts receivable and accounts payable approximate fair value due to the short-term maturity of the instruments.

Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when evidence of impairment exists. For the thirty-nine week period ended December 25, 2011, no fair value adjustment or material fair value measurements were required for non-financial assets or liabilities.