XML 20 R11.htm IDEA: XBRL DOCUMENT v3.22.4
Fair Value Measurements
 3 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
In accordance with the authoritative guidance on fair value measurements and disclosure under GAAP, the Company determines fair value using a fair value hierarchy that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances and expands disclosure about fair value measurements.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date, essentially the exit price.
The levels of fair value hierarchy are:
Level 1: Quoted prices in active markets for identical assets and liabilities at the measurement date that the Company has the ability to access.
Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3: Unobservable inputs for which there is little or no market data available. These inputs reflect management's assumptions of what market participants would use in pricing the asset or liability.
Level 1 investments are valued based on quoted market prices in active markets and include the Company's cash equivalent investments. Level 2 investments, which include investments that are valued based on quoted prices in markets that are not active, broker or dealer quotations, actual trade data, benchmark yields or alternative pricing sources with reasonable levels of price transparency, include the Company's certificates of deposit, corporate bonds and notes, municipal bonds and notes, U.S. government securities, U.S. government agency securities and international government securities. Fair values for the Company's level 2 investments are based on similar assets without applying significant judgments. In addition, all of the Company's level 2 investments have a sufficient level of trading volume to demonstrate that the fair values used are appropriate for these investments.
A financial instrument's level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes "observable" requires significant judgment by the Company. The Company considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
The Company's financial assets measured at fair value on a recurring basis subject to the disclosure requirements at December 31, 2022 and September 30, 2022, were as follows (in thousands):
  Gross Unrealized Classification on Balance Sheet
December 31, 2022Fair Value Level Cost or Amortized Cost Gains Losses Aggregate
Fair Value		Cash and Cash Equivalents Short-Term Investments Long-Term Investments
Changes in fair value recorded in other comprehensive income
Money Market FundsLevel 1$208,279 $— $— $208,279 $208,279 $— $— 
Corporate bonds and notesLevel 230,908 — (613)30,295 — 26,595 3,700 
Municipal bonds and notesLevel 22,962 — (81)2,881 — 2,785 96 
U.S. government securitiesLevel 223,154 — (246)22,908 — 22,908 — 
U.S. government agency securitiesLevel 21,784 — (57)1,727 — 1,727 — 
Total debt investments$267,087 $— $(997)$266,090 $208,279 $54,015 $3,796 
Changes in fair value recorded in other net income (expense)
Equity investments*$4,016 $— $— $4,016 
Total equity investments4,016 — — 4,016 
Total investments$270,106 $208,279 $54,015 $7,812 
 * The fair value of this equity investment is measured at net asset value (NAV) which approximates fair value and is not classified within the fair value hierarchy.
  Gross Unrealized Classification on Balance Sheet
September 30, 2022Fair Value LevelCost or Amortized Cost Gains Losses Aggregate
Fair Value		Cash and Cash Equivalents Short-Term Investments Long-Term Investments
Changes in fair value recorded in other comprehensive income
Money Market FundsLevel 1$276,294 $— $— $276,294 $276,294 $— $— 
Corporate bonds and notesLevel 250,828 — (950)49,878 912 44,356 4,610 
Municipal bonds and notesLevel 25,018 — (102)4,916 — 3,812 1,104 
U.S. government securitiesLevel 284,734 — (660)84,074 10,120 73,954 — 
U.S. government agency securitiesLevel 25,825 — (75)5,750 606 4,432 712 
Total debt investments$422,699 $— $(1,787)$420,912 $287,932 $126,554 $6,426 
Changes in fair value recorded in other net income (expense)
Equity investments*$3,118 $— $— $3,118 
Total equity investments3,118 — — 3,118 
Total investments$424,030 $287,932 $126,554 $9,544 
* The fair value of this equity investment is measured at NAV which approximates fair value and is not classified within the fair value hierarchy.
The Company uses the fair value hierarchy for financial assets and liabilities. The carrying amounts of other current financial assets and other current financial liabilities approximate fair value due to their short-term nature.
Interest income from investments was not material for the three months ended December 31, 2022 and 2021. Interest income is included in other income (expense), net on the Company's consolidated income statements. Unrealized losses on investments held for a period greater than 12 months at December 31, 2022 and September 30, 2022 were not material.
The Company invests in debt securities that are rated investment grade. The Company reviews the individual debt securities in its portfolio to determine whether a credit loss exists by comparing the extent to which the fair value is less than the amortized cost and considering any changes to ratings of a debt security by a ratings agency. The Company determined that as of December 31, 2022, there were no credit losses on any investments within its portfolio.
Assets Measured and Recorded at Fair Value on a Non-Recurring Basis
The Company's non-financial assets and liabilities, which include goodwill, intangible assets, and long-lived assets, are not required to be carried at fair value on a recurring basis. These non-financial assets and liabilities are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. The Company reviews goodwill for impairment annually, during the second quarter of each fiscal year, or as circumstances indicate the possibility of impairment. The Company monitors the carrying value of tangible and intangible long-lived assets for impairment whenever events or changes in circumstances indicate its carrying amount may not be recoverable.
The Company did not recognize any impairment charges related to its intangible assets in the first quarter of fiscal 2023. In the first quarter of fiscal 2022, as a result of a planned change in the use of the asset, the Company recorded an impairment of $6.2 million against the Shape trade name intangible asset, which was reflected in the Sales and Marketing line item on the Company's consolidated income statement.
During the three months ended December 31, 2022 and 2021, the Company did not recognize any impairment charges related to goodwill or long-lived assets.