Adtalem has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets and assets of businesses where the long-term value of the operations have been impaired.

Fair value is defined 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. The guidance specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The guidance establishes fair value measurement classifications under the following hierarchy:

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

When available, Adtalem uses quoted market prices to determine fair value, and such measurements are classified within Level 1. In some cases where market prices are not available, Adtalem makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates and yield curves. These measurements are classified within Level 3.

Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

Assets measured at fair value on a nonrecurring basis include goodwill and indefinite-lived intangibles arising from a business combination. These assets are not amortized and charged to expense over time. Instead, goodwill and indefinite-lived intangibles must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2018. See “Note 9: Intangible Assets” for further discussion on the impairment review including valuation techniques and assumptions.

The following table presents Adtalem's assets and liabilities at March 31, 2019, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	321,211	$	-	$	-
Investments in Marketable Securities		8,341		-		-
Institutional Loans Receivable, Net		-		42,577		-
Loan Receivable from DeVry University		-		10,000		-
Deferred Acquisition Obligations		-		16,001		-
Total Financial Assets at Fair Value	$	329,552	$	68,578	$	-

The following table presents Adtalem's assets and liabilities at June 30, 2018, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	430,690	$	-	$	-
Investments in Marketable Securities		4,255		-		-
Institutional Loans Receivable, Net		-		44,320		-
Deferred Acquisition Obligations		-		18,585		-
Total Financial Assets at Fair Value	$	434,945	$	62,905	$	-

The following table presents Adtalem's assets and liabilities at March 31, 2018, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

	Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	265,325	$	-	$	-
Investments in Marketable Securities		4,200		-		-
Institutional Loans Receivable, Net		-		41,646		-
Deferred Acquisition Obligations		-		21,393		-
FIES Receivable		-		15,094		-
Total Financial Assets at Fair Value	$	269,525	$	78,133	$	-

Cash and Cash Equivalents and Investments in Marketable Securities are valued using a market approach based on quoted market prices of identical instruments.

The fair value of the institutional loans receivable included in Accounts Receivable, Net and Other Assets, Net on the Consolidated Balance Sheets as of March 31, 2019, June 30, 2018 and March 31, 2018 is estimated by discounting the future cash flows using current rates for similar arrangements. See “Note 6: Financing Receivables” for further discussion on these institutional loans receivable.

In connection with the completion of the sale of DeVry University, Adtalem loaned $10.0 million to DeVry University under the terms of the Note. The Note bears interest at a rate of 4% per annum, payable annually in arrears, and has a maturity date of January 1, 2022. The fair value of the DeVry University loan receivable included in Other Assets, Net on the Consolidated Balance Sheet as of March 31, 2019 is estimated by discounting the future cash flows using current rates for similar arrangements.

The fair value of the deferred acquisition obligations is estimated by discounting the future cash flows using current rates for similar arrangements. The amounts of $6.1 million, $4.3 million and $4.8 million were classified as Accrued Liabilities on the Consolidated Balance Sheets at March 31, 2019, June 30, 2018 and March 31, 2018, respectively, and $9.9 million, $14.3 million and $16.6 million were classified as Other Liabilities on the Consolidated Balance Sheets at March 31, 2019, June 30, 2018 and March 31, 2018, respectively.

The fair value of Adtalem Brazil’s receivable under Brazil’s “Fundo de Financiamento Estudantil” or “Students Financing Fund” (“FIES”) public loan program included in Accounts Receivable, Net on the Consolidated Balance Sheet as of March 31, 2018 is estimated by discounting the future cash flows using published market data on Brazilian interest and inflation rates.

As of March 31, 2019, June 30, 2018 and March 31, 2018, there were no assets or liabilities measured at fair value using Level 3 inputs.