Fair Value

9 Months Ended

Oct. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 4. Fair Value

The Company applies ASC 820, “Fair Value Measurements and Disclosures”, (“ASC 820”) which provides a framework for measuring fair value under accounting principles generally accepted in the United States of America. This accounting standard defines fair value 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 on the measurement date.

The Company determines the fair market values of its financial instruments based on the fair value hierarchy established by ASC 820 which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values which are provided below. The Company carries an investment in cooperative at fair value.

The fair values of property and equipment, as applicable, are determined by using various models that discount future expected cash flows. Estimation risk is greater for vacant properties as the probability of expected cash flows from the use of vacant properties is difficult to predict.

Financial assets and liabilities measured at fair value on a recurring basis at October 31, 2015 are summarized below (amounts in thousands):

	Level 1		Level 2		Level 3		Fair Value
Derivative financial instruments (1)	$	446	$	—	$	—	$	446
Investment in cooperative (2)		—		—		333		333
Total assets	$	446	$	—	$	333	$	779
Forward purchase contract liability (3)	$	—	$	—	$	414	$	414

Financial assets and liabilities measured at fair value on a recurring basis at January 31, 2015 are summarized below (amounts in thousands):

	Level 1		Level 2		Level 3		Fair Value
Investment in cooperative (2)	$	—	$	—	$	333	$	333

(1) The derivative financial instruments are included in “Prepaid expenses and other current assets” on the accompanying Consolidated Condensed Balance Sheets.

(2) The investment in cooperative is included in “Other assets” on the accompanying Consolidated Condensed Balance Sheets.

(3) The forward purchase contract liability is included in “Accrued expenses and other current liabilities” on the accompanying Consolidated Condensed Balance Sheets.

The Company determined the fair value of derivative financial instruments by obtaining unadjusted quoted prices in active markets for identical assets.

The Company determined the fair value of the investment in cooperative by using a discounted cash flow analysis on the expected cash flows. Inputs used in the analysis include the face value of the allocated equity amount, the projected term for repayment based upon a historical trend, and a risk adjusted discount rate based on the expected compensation participants would demand because of the uncertainty of the future cash flows. The inherent risk and uncertainty associated with unobservable inputs could have a significant effect on the actual fair value of the investment.

The Company determined the fair value of the forward purchase contracts by comparing the fixed purchase price included in the contracts to an equivalent purchase price published on commodity exchanges. Inputs used in the analysis include the quantity of corn to purchase and the delivery date of such corn. The inherent risk and uncertainty associated with unobservable inputs could have a significant effect on the actual fair value of the investment.

There were no assets measured at fair value on a non-recurring basis at October 31, 2015 or January 31, 2015.