XML 25 R17.htm IDEA: XBRL DOCUMENT v3.22.2
Fair Value of Financial Instruments
12 Months Ended
Aug. 31, 2021
Fair Value of Financial Instruments  
Fair Value of Financial Instruments

Note 10. Fair Value of Financial Instruments

Management estimates the fair value of its assets or liabilities measured at fair value based on the three levels of the fair-value hierarchy are described as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. For the Company, Level 1 inputs include marketable securities and liabilities for short sales of trading securities that are actively traded.

Level 2: Inputs other than Level 1 are observable, either directly or indirectly. The Company does not hold any Level 2 financial instruments.

Level 3: Unobservable inputs. The Company does not hold any Level 3 financial instruments.

Marketable Trading Securities – The Company holds marketable trading securities, which include long and short positions that are all publicly traded securities with quoted prices in active markets. These securities are stated at fair value, which is determined using the quoted closing prices at each reporting date. Short positions represent securities sold, but not yet purchased. Short sales result in obligations to purchase securities at a later date and are separately presented as a liability in the Company’s consolidated balance sheets. The fair value of the marketable trading securities and short positions are considered to be Level 1 measurements.

The following table sets forth by level, within the fair value hierarchy, certain assets at estimated fair value as of August 31, 2021 and 2020:

Quoted Prices in

Significant Other

Significant

Active Markets for

Observable

Unobservable

Identical Assets

Inputs

Inputs

    

(Level 1)

    

(Level 2)

    

(Level 3)

    

Total

August 31, 2021

 

  

 

  

 

  

 

  

Marketable securities

$

3,741,000

$

3,741,000

Liability for short sales of trading securities

 

 

 

 

August 31, 2020

 

 

  

 

  

 

Marketable securities

$

1,368,000

$

1,368,000

Liability for short sales of trading securities

 

(2,916,000)

 

 

 

(2,916,000)