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FAIR VALUE | 3 Months Ended
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Nov. 30, 2021
Fair Value Disclosures [Abstract] |
Fair value | NOTE 10. FAIR VALUE The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined within the Nature of Operations and Summary of Significant Accounting Policies footnote in the 2021 Form 10-K. The following tables summarize information regarding the Company's financial assets and financial liabilities that were measured at fair value on a recurring basis:
|  |  |  | Fair Value Measurements at Reporting Date Using
(in thousands) |  | November 30, 2021 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |  |
Investment deposit accounts (1) |  | $ | 361,387 |  |  | $ | 361,387 |  |  | $ | — |  |  | $ | — |
Commodity derivative assets (2) |  | 50,253 |  |  | 2,361 |  |  | — |  |  | 47,892 |
Foreign exchange derivative assets (2) |  | 1,207 |  |  | — |  |  | 1,207 |  |  | — |
Liabilities: |  |  |  |  |  |  |  |
Commodity derivative liabilities (2) |  | 375 |  |  | 375 |  |  | — |  |  | — |
Foreign exchange derivative liabilities (2) |  | 4,072 |  |  | — |  |  | 4,072 |  |  | — |
|  |  |  | Fair Value Measurements at Reporting Date Using
(in thousands) |  | August 31, 2021 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |  |
Investment deposit accounts (1) |  | $ | 441,297 |  |  | $ | 441,297 |  |  | $ | — |  |  | $ | — |
Commodity derivative assets (2) |  | 27,323 |  |  | 910 |  |  | — |  |  | 26,413 |
Foreign exchange derivative assets (2) |  | 2,537 |  |  | — |  |  | 2,537 |  |  | — |
Liabilities: |  |  |  |  |  |  |  |
Commodity derivative liabilities (2) |  | 1,352 |  |  | 1,352 |  |  | — |  |  | — |
Foreign exchange derivative liabilities (2) |  | 1,880 |  |  | — |  |  | 1,880 |  |  | — |
_________________ (1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. The investment portfolio mix can change each period based on the Company's assessment of investment options. (2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Derivatives classified as Level 3 are described below. Further discussion regarding the Company's use of derivative instruments is included in Note 9, Derivatives. The fair value estimate of the Level 3 commodity derivative is based on an internally developed discounted cash flow model primarily utilizing unobservable inputs in which there is little or no market data. The Company forecasts future energy rates using a range of historical prices ("floating rate"). The floating rate is the only significant unobservable input used in the Company's discounted cash flow model. The following table summarizes the floating rate used to measure the fair value of the commodity derivative at November 30, 2021 and 2020:
|  | Floating rate (PLN)
November 30, |  | Low |  | High |  | Average
2021 |  | 252.79 |  |  | 540.39 |  |  | 348.99 |
2020 |  | 151.66 |  |  | 247.56 |  |  | 203.96 |
Below is a reconciliation of the beginning and ending balances of the Level 3 commodity derivative recognized in the condensed consolidated statements of comprehensive income. The fluctuation in energy rates over time may cause volatility in the fair value estimate and is the primary reason for unrealized gains and losses included in other comprehensive income ("OCI") in the three months ended November 30, 2021 and 2020.
(in thousands) |  | Three Months Ended November 30, 2021
Balance, September 1, 2021 |  | $ | 26,413 |
Total gains, realized and unrealized |  |
Unrealized holding gain(1) |  | 25,208 |
Reclassification for gain included in net earnings(2) |  | (3,729) |
Balance, November 30, 2021 |  | $ | 47,892 |
(in thousands) |  | Three Months Ended November 30, 2020
Balance, September 1, 2020 |  | $ | (15,007) |
Total gains, realized and unrealized |  |
Unrealized holding gain(1) |  | 1,393 |
Balance, November 30, 2020 |  | $ | (13,614) |
________________ (1) Unrealized holding gains are included in OCI in the condensed consolidated statements of comprehensive income. (2) Gains included in net earnings are recorded in cost of goods sold in the condensed consolidated statements of earnings. There were no material non-recurring fair value remeasurements during the three months ended November 30, 2021 or 2020. The carrying values of the Company's short-term items, including documentary letters of credit and notes payable, approximate fair value. The carrying values and estimated fair values of the Company's financial assets and liabilities that are not required to be measured at fair value on the condensed consolidated balance sheets were as follows:
|  |  |  | November 30, 2021 |  | August 31, 2021
(in thousands) |  | Fair Value Hierarchy |  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
2031 Notes (1) |  | Level 2 |  | $ | 300,000 |  |  | $ | 297,378 |  |  | $ | 300,000 |  |  | $ | 306,279 |
2027 Notes (1) |  | Level 2 |  | 300,000 |  |  | 309,978 |  |  | 300,000 |  |  | 316,839 |
2023 Notes (1) |  | Level 2 |  | 330,000 |  |  | 341,058 |  |  | 330,000 |  |  | 348,071 |
Poland Term Loan(2) |  | Level 2 |  | 44,055 |  |  | 44,055 |  |  | 49,726 |  |  | 49,726 |
Short-term borrowings (2) |  | Level 2 |  | 29,992 |  |  | 29,992 |  |  | 26,560 |  |  | 26,560 |
_________________ (1) The fair values of the Notes were determined based on indicated market values. (2) The Poland Term Loan and short-term borrowings contain variable interest rates, and as a result, the carrying values approximate fair value.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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