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Fair Value Measurements

9 Months Ended

Apr. 30, 2020

In accordance with fair value accounting guidance, the Company determines fair value based on the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The inputs used to measure fair value are classified into the following hierarchy:

Level 1 — Unadjusted quoted prices in active markets for identical instruments that are accessible as of the reporting date.

Level 2 — Other significant pricing inputs that are either directly or indirectly observable.

Level 3 — Significant unobservable pricing inputs, which result in the use of management's own assumptions.

The following table summarizes the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis at April 30, 2020 and July 31, 2019, according to the valuation techniques the Company used to determine their fair values.


	April 30, 2020		July 31, 2019		Fair Value Hierarchy
Assets:
Trading securities	$	17,172	$	15,744	Level 1
Foreign exchange contracts	241		474		Level 2
Liabilities:
Foreign exchange contracts	1,360		5		Level 2

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Trading securities: The Company’s deferred compensation investments consist of investments in mutual funds, which are included in "Other assets" on the condensed consolidated balance sheets. These investments were classified as Level 1 as the shares of these investments trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis.

Foreign exchange contracts: The Company’s foreign exchange contracts were classified as Level 2 as the fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield curves and foreign exchange rates. See Note L, “Derivatives and Hedging Activities,” for additional information.

There have been no transfers between fair value hierarchy levels during the nine months ended April 30, 2020.

The fair values of cash and cash equivalents, accounts receivable, inventories, accounts payable, and other current liabilities approximated carrying values due to their short-term nature.

During the three months ended April 30, 2020, impairment charges of $13,821 were recorded in connection with writing down the carrying values of certain other intangible and long-lived assets to their respective fair values. These represented Level 3 assets measured at fair value on a nonrecurring basis subsequent to their original recognition. Refer to Note D, "Other Intangible and Long-Lived Assets" for additional information on the methods and assumptions used to determine fair value.

The following table summarizes the estimated fair value of the Company’s current maturities on its long-term debt obligations, at April 30, 2020 and July 31, 2019, which was based on the quoted market prices for similar issues and on the current rates offered for debt of similar maturities.


	April 30, 2020						July 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Current maturities on long-term debt	$	48,927	$	48,988	$	50,166	$	51,566

- 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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