FAIR VALUE MEASUREMENTS

ASC Topic 820 provides that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC Topic 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:


Level 1:	Observable inputs such as quoted prices for identical assets or liabilities in active markets


Level 2:	Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs


Level 3:	Unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants would price the assets or liabilities

The carrying value of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, current liabilities and the revolving line of credit approximate fair value because of the short maturity of these instruments. We believe that the carrying value of our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates. The carrying value of capital lease obligations approximates fair value, as estimated by using discounted future cash flows based on the Company's current incremental borrowing rates for similar types of borrowing arrangements. The defined benefit plans have 100% of their assets invested in bank-managed portfolios of debt securities and other assets. Conservation of capital with some conservative growth potential is the strategy for the plans. The Company's pension plans are outside the United States, where asset allocation decisions are typically made by an independent board of trustees. Investment objectives are aligned to generate returns that will enable the plans to meet their future obligations. The Company acts in a consulting and governance role in reviewing investment strategy and providing a recommended list of investment managers for each plan, with final decisions on asset allocation and investment manager made by local trustees.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following tables present the Company's financial assets measured at fair value on a recurring basis as of July 31, 2019 and 2018, classified by fair value hierarchy:



			Fair Value Measurements at Reporting Date Using
(In thousands)	July 31, 2019		Level 1		Level 2		Level 3
Assets:
Money market funds	$	365	$	365	$	—	$	—



			Fair Value Measurements at Reporting Date Using
(In thousands)	July 31, 2018		Level 1		Level 2		Level 3
Assets:
Money market funds	$	47,186	$	47,186	$	—	$	—

The following table presents the pension plan assets measured at fair value on a recurring basis as of July 31, 2019 and 2018, classified by fair value hierarchy:



					Fair Value Measurements at Reporting Date Using
(In thousands)	July 31, 2019		Asset Allocations		Level 1		Level 2		Level 3
Insurance contract	$	26,651	98	%	$	—	$	—	$	26,651
Other investments	616		2	%	—		—		616
	$	27,267	100	%	$	—	$	—	$	27,267



					Fair Value Measurements at Reporting Date Using
(In thousands)	July 31, 2018		Asset Allocations		Level 1		Level 2		Level 3
Insurance contract	$	22,339	98	%	$	—	$	—	$	22,339
Other investments	521		2	%	—		—		521
	$	22,860	100	%	$	—	$	—	$	22,860

The following table sets forth a summary of the changes in the fair value of the pension plan assets for the years ended July 31, 2019 and 2018:



	July 31,
	2019			2018
	(In thousands)
Fair value of plan assets at beginning of year	$	22,860		$	21,204
Actual return on plan assets	5,136			1,541
Employer contributions, net	422			402
Employee contributions	73			92
Settlements	(19		)	(21		)
Benefits and administrative expenses paid	(197		)	(372		)
Currency translation	(1,008		)	14
Fair value of plan assets at end of year	$	27,267		$	22,860

There were no transfers between Levels 1, 2 or 3 during any of the periods presented.

When available, quoted prices were used to determine fair value. When quoted prices in active markets were available, investments were classified within Level 1 of the fair value hierarchy. When quoted prices in active markets were not available, fair values were determined using pricing models, and the inputs to those pricing models were based on observable market inputs. The inputs to the pricing models were typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

The Company reviews the carrying amounts of these assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. An impairment loss is recognized when the carrying amount of the asset group or reporting unit is not recoverable and exceeds its fair value. The Company estimated the fair values of assets subject to impairment based on the Company's own judgments about the assumptions that market participants would use in pricing the assets and on observable market data, when available.

Fair Value of Financial Instruments

The Company's financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, customer deposits, accounts payable, restricted cash and debt, and are reflected in the financial statements at cost. With the exception of the SPHG Note, the Notes payable and long-term debt, cost approximates fair value for these items due to their short-term nature. We believe that the carrying value of the liability component of the SPHG Note and our long-term debt approximates fair value because the stated interest rates of this debt is consistent with current market rates.

Included in cash and cash equivalents in the accompanying balance sheet are money market funds. These are valued at quoted market prices in active markets.

The following table presents the Company's Notes payable which were not carried at fair value:



	July 31, 2018
	Carrying Amount		Fair Value		Fair Value Hierarchy
	(In thousands)
Notes payable	$	64,530	$	66,658	Level 1

The fair value of the Company's Notes payable represented the value at which its lenders could trade its debt within the financial markets, and did not represent the settlement value of these debt liabilities to us. The fair value of the Notes payable could vary each period based on fluctuations in market interest rates, as well as changes to our credit ratings. The Notes payable were traded and their fair values were based upon traded prices as of the reporting date.