Fair Value Measurements and Financial Instruments

9 Months Ended

Nov. 30, 2017

Fair Value Measurements and Financial Instruments

Note 3. – Fair Value Measurements and Financial Instruments

The Financial Accounting Standards Board’s (FASB’s) fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices 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 assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets measured at fair value on a recurring basis by the Company consist of investment securities held for trading using Level 1 inputs. The following table sets forth financial assets and liabilities that were accounted for at fair value on a recurring basis as of November 30, 2017 and February 28, 2017 (in thousands):

	November 30, 2017			Level 1 Assets and Liabilities			Level 2 Assets and Liabilities		Level 3 Assets and Liabilities
Current trading investments:
Stocks, options and ETF (long)		745			745			—		—
Stocks, options and ETF (short)		(7	)		(7	)		—		—
Total value of investments	$	738		$	738			—		—
Current Liabilities:
Margin balance		(468	)		(468	)
Total value of liabilities		(468	)		(468	)
Total	$	270		$	270			—		—

	February 28, 2017			Level 1 Assets and Liabilities			Level 2 Assets and Liabilities		Level 3 Assets and Liabilities
Current trading investments:
Stocks, options and ETF (long)		484			484			—		—
Stocks, options and ETF (short)		(2	)		(2	)
Total value of investments	$	482		$	482			—		—
Current Liabilities:
Margin balance		(114	)		(114	)
Total value of liabilities		(114	)		(114	)
Total	$	368		$	368			—		—

The Company’s financial instruments which are not measured at fair value on the consolidated balance sheets include cash, accounts receivable, short-term liabilities, and debt. The estimated fair value of these financial instruments were determined using Level 2 inputs and approximate cost due to the short period of time to maturity. Recorded amounts of long-term debt are considered to approximate fair value due to either interest rates that fluctuate with the market or are otherwise commensurate with the current market.