Fair Value Measurements

3 Months Ended

Jun. 30, 2019

The accounting standard for fair value measurements provides a framework for measuring fair value, which is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy under this accounting standard requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required:


•	Level 1: Quoted prices in active markets for identical assets and liabilities.


•	Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities.


•	Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring the Company to develop its own assumptions.

The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued payroll, and other accrued expenses, approximates fair value due to their short-term nature. The carrying amount of the Company’s short-term borrowings and mortgage payable, which are considered Level 2 liabilities, approximates fair value based upon current rates and terms available to the Company for similar debt.

The assets and liabilities that are measured on a recurring basis at fair value in the condensed consolidated balance sheets, are as follows:



				Measured Using
	June 30, 2019			Level 1			Level 2			Level 3
Non-qualified deferred compensation asset	$	7,473		$	7,473		$	—		$	—
Non-qualified deferred compensation liability	(4,406		)	(4,406		)	—			—
Designated Derivative Contracts liability	(417		)	—			(417		)	—
Non-Designated Derivative Contracts liability	(356		)	—			(356		)	—



				Measured Using
	March 31, 2019			Level 1			Level 2		Level 3
Non-qualified deferred compensation asset	$	7,300		$	7,300		$	—	$	—
Non-qualified deferred compensation liability	(4,447		)	(4,447		)	—		—

In 2010, the Company established a non-qualified deferred compensation program that permits a select group of management employees to defer earnings to a future date on a non-qualified basis. Deferred compensation is recognized based on the fair value of the participants' accounts. A rabbi trust was established for the purpose of supporting benefits payable under this program, with the assets invested in Company-owned life insurance policies. As of June 30, 2019, the non-qualified deferred compensation asset of $7,473 was recorded in other assets in the condensed consolidated balance sheets. As of June 30, 2019, the non-qualified deferred compensation liability of $4,406 was recorded in the condensed consolidated balance sheets, with $1,174 in other accrued expenses and $3,232 in other long-term liabilities.

The Level 2 inputs consist of forward spot rates at the end of the applicable reporting period. The fair values of liabilities associated with derivative instruments and hedging activities are recorded in other accrued expenses, in the condensed consolidated balance sheets. Refer to Note 9, “Derivative Instruments,” for further information.

- 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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