Fair Value Measurements

3 Months Ended

Sep. 26, 2020

FAIR VALUE MEASUREMENTS

The FASB established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs that may be used to measure fair value are as follows:

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

The Company’s Level 1 assets consist of money market funds.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

The Company’s Level 2 assets and liabilities consist of corporate debt securities and foreign currency forward contracts that are valued using quoted market prices or are determined using a yield curve model based on current market rates.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company's Level 3 assets and liabilities consist of acquisition-related contingent consideration liabilities.

Assets and liabilities measured at fair value on a recurring basis were as follows:



	As of September 26, 2020								As of June 27, 2020
	Fair Value Measurements Using						Total		Fair Value Measurements Using						Total
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash and cash equivalents
Money market funds	$	26,629	$	—	$	—	$	26,629	$	61,814	$	—	$	—	$	61,814
Short-term investments
Corporate debt securities	—		17,022		—		17,022		—		35,536		—		35,536
Other current assets
Foreign currency forward contracts	—		1,228		—		1,228		—		1,151		—		1,151
Total assets	$	26,629	$	18,250	$	—	$	44,879	$	61,814	$	36,687	$	—	$	98,501

Liabilities
Accrued expenses
Foreign currency forward contracts	$	—	$	596	$	—	$	596	$	—	$	341	$	—	$	341
Contingent consideration	—		—		10,000		10,000		—		—		10,000		10,000
Other liabilities
Contingent consideration	—		—		4,165		4,165		—		—		4,165		4,165
Total Liabilities	$	—	$	596	$	14,165	$	14,761	$	—	$	341	$	14,165	$	14,506

During the three months ended September 26, 2020 and the year ended June 27, 2020, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy.

There were no assets or liabilities measured at fair value on a non-recurring basis as of September 26, 2020 and June 27, 2020 other than impairments of long-lived assets.

As of September 26, 2020 and June 27, 2020, the fair value of private company investments amounted to $21.2 million and $20.6 million, respectively. The aggregate amount of unrealized losses recognized from these investments were $3.8 million and $4.3 million, respectively, as of September 26, 2020 and June 27, 2020.

The Company recorded $0.5 million of unrealized gains on private company investments, during the three months ended September 26, 2020. Unrealized gains (loss) on private company investments was not material during the three months ended September 28, 2019. Unrealized gains (losses) on private company investments are recorded in Interest and other income (expense), net in the Company's Condensed Consolidated Statements of Income.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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