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Fair Value Measurements
 6 Months Ended
Jul. 28, 2012
Fair Value Measurements  
Fair Value Measurements

5.  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 (an exit price).  ASC 820, “Fair Value Measurement and Disclosures”, outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures and prioritizes the inputs used in measuring fair value as follows:

 

Level 1: Observable inputs such as quoted prices in active markets;

 

Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

 

Level 3:    Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

Assets measured at fair value on a recurring basis as of July 28, 2012 and January 28, 2012 are set forth in the table below (in thousands):

 

 

 Description

 

Level 1

 

Level 2

 

Level 3

 

 As of July 28, 2012

 

 

 

 

 

 

 

 Assets:

 

 

 

 

 

 

 

Deferred compensation plan assets held in trust

 

$

33,339

 

$

-

 

$

-

 

Total assets

 

$

33,339

 

$

-

 

$

-

 

 As of January 28, 2012

 

 

 

 

 

 

 

 Assets:

 

 

 

 

 

 

 

Deferred compensation plan assets held in trust

 

$

27,102

 

$

-

 

$

-

 

Total assets

 

$

27,102

 

$

-

 

$

-

 

 

The fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated book value due to the short-term nature of these instruments at both July 28, 2012 and January 28, 2012.

 

The Company uses quoted prices in active markets to determine the fair value of the aforementioned assets determined to be Level 1 instruments.  There were no transfers between Level 1 and 2 during the 26 weeks ended July 28, 2012.  The Company’s policy for recognition of transfers between levels of the fair value hierarchy is to recognize any transfer at the end of the fiscal quarter in which the determination to transfer was made.

 

The following table provides a reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs (in thousands):

 

 

 

13 Weeks Ended

 

26 Weeks Ended

 

 

July 28,

 

July 28,

 

 

2012

 

2012

Beginning balance

 

$

-

 

$

-

 

 

 

 

 

Transfers in (see Note 4)

 

32,370

 

32,370

 

 

 

 

 

Total realized losses included in net income

 

(32,370)

 

(32,370)

 

 

 

 

 

 

 

Ending balance

 

$

-

 

$

-

 

Realized losses are included within impairment of available-for-sale investments on the unaudited Consolidated Statements of Income.