Fair Value Measurements

9 Months Ended

Jun. 30, 2012

Fair Value Measurements

Note 9.           Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company categorizes its assets and liabilities recorded at fair value based upon the following fair value hierarchy established by the Financial Accounting Standards Board:

Level 1:	Quoted market prices in active markets for identical assets and liabilities.
Level 2:	Observable inputs other than defined in Level 1, 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 not corroborated by observable market data.

The following table summarizes financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2012:

Level 2:
Interest Rate Swap liability:
Balance at September 30, 2011	$57,000
Balance at June 30, 2012	$11,000
Net change	$46,000

The unrealized gains for the nine month periods ending June 30, 2012 and June 30, 2011 of $16,000 and $25,000, respectively, are reported in the Condensed Consolidated Statement of Operations. In conjunction with the amendment to the Wells Fargo Bank note in December 2011 we paid down the interest rate swap liability by $30,000, thereby aligning the balance due on the note with the interest rate swap agreement. There were no transfers in or out of Level 3 for the nine month period ending June 30, 2012.