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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2018
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or the price that would be paid to transfer a liability as of the measurement date. A fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The levels are: Level 1 – Quoted prices for identical instruments in active markets. Level 1 assets may include equity and debt securities that are traded in an active exchange market, including shares of mutual funds. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs. Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active markets. NAV Practical Expedient – Investments that calculate NAV per share (or its equivalent) as a practical expedient. These investments have been excluded from the fair value hierarchy. (a) Fair Value Measurements on a Recurring Basis The following table presents fair value measurements for classes of Federated's financial assets and liabilities measured at fair value on a recurring basis:
(in thousands) |  | Level 1 |  | Level 2 |  | Level 3 |  | NAV Practical Expedient |  | Total
September 30, 2018 |  |  |  |  |  |  |  |  |  |
Financial Assets |  |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents |  | $ | 116,943 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 116,943 |
Investments—Consolidated Investment Companies |  |  |  |  |  |  |  |  |  |
Equity Securities |  | 1,382 |  |  | 719 |  |  | 0 |  |  | 0 |  |  | 2,101 |
Debt Securities |  | 0 |  |  | 29,636 |  |  | 0 |  |  | 0 |  |  | 29,636 |
Investments—Affiliates and Other |  |  |  |  |  |  |  |  |  |
Equity Securities |  | 5,092 |  |  | 0 |  |  | 39 |  |  | 288 |  |  | 5,419 |
Debt Securities |  | 0 |  |  | 2,960 |  |  | 0 |  |  | 0 |  |  | 2,960 |
Other 1 |  | 592 |  |  | 113 |  |  | 70 |  |  | 0 |  |  | 775 |
Total Financial Assets |  | $ | 124,009 |  |  | $ | 33,428 |  |  | $ | 109 |  |  | $ | 288 |  |  | $ | 157,834 |
Total Financial Liabilities 2 |  | $ | 7 |  |  | $ | 3,815 |  |  | $ | 734 |  |  | $ | 0 |  |  | $ | 4,556 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |
Financial Assets |  |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents |  | $ | 205,364 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 110,900 |  |  | $ | 316,264 |
Investments—Consolidated Investment Companies |  |  |  |  |  |  |  |  |  |
Equity Securities |  | 5,424 |  |  | 746 |  |  | 0 |  |  | 0 |  |  | 6,170 |
Debt Securities |  | 0 |  |  | 39,241 |  |  | 0 |  |  | 0 |  |  | 39,241 |
Investments—Affiliates and Other |  |  |  |  |  |  |  |  |  |
Equity Securities |  | 4,564 |  |  | 0 |  |  | 0 |  |  | 302 |  |  | 4,866 |
Debt Securities |  | 0 |  |  | 2,997 |  |  | 0 |  |  | 0 |  |  | 2,997 |
Other 1 |  | 123 |  |  | 357 |  |  | 760 |  |  | 0 |  |  | 1,240 |
Total Financial Assets |  | $ | 215,475 |  |  | $ | 43,341 |  |  | $ | 760 |  |  | $ | 111,202 |  |  | $ | 370,778 |
Total Financial Liabilities 2 |  | $ | 0 |  |  | $ | 0 |  |  | $ | 1,203 |  |  | $ | 0 |  |  | $ | 1,203 |
1 | Amounts include restricted cash, structured trade finance loans held by Federated as well as futures contracts and/or foreign currency forward contracts held within certain consolidated Federated Funds.
2 | Amounts include derivative liabilities, acquisition-related future contingent consideration liabilities as well as certain liabilities attributable to structured trade finance loans held by Federated and may include foreign currency forward contracts and/or futures contracts held within certain consolidated Federated Funds.
The following is a description of the valuation methodologies used for financial assets and liabilities measured at fair value on a recurring basis. Federated did not hold any nonfinancial assets or liabilities measured at fair value on a recurring basis at September 30, 2018 or December 31, 2017. Cash and Cash Equivalents Cash and Cash Equivalents include deposits with banks and investments in money market funds. Investments in money market funds totaled $78.0 million and $311.0 million at September 30, 2018 and December 31, 2017, respectively. Cash investments in publicly available money market funds are valued under the market approach through the use of quoted market prices in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy. For an investment in a money market Federated Fund that is not publicly available but for which the NAV is calculated daily and for which there are no redemption restrictions, the security is valued using NAV as a practical expedient and is excluded from the fair value hierarchy. This investment is included in the NAV Practical Expedient column in the December 31, 2017 table above. Investments—Consolidated Investment Companies—Equity Securities Investments—Consolidated Investment Companies—Equity Securities represent equity securities held by consolidated Federated Funds. For publicly traded equity securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on quoted market prices. The fair value of certain equity securities traded principally in foreign markets and held by consolidated Federated Funds are determined by a third-party pricing service (Level 2). Investments—Consolidated Investment Companies—Debt Securities Investments—Consolidated Investment Companies—Debt Securities primarily represent domestic and foreign bonds held by consolidated Federated Funds. The fair value of these securities may include observable market data such as valuations provided by independent pricing services after considering factors such as the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions (Level 2). Investments—Affiliates and Other—Equity Securities Investments—Affiliates and Other—Equity Securities primarily represent equity investments held in Separate Accounts as well as investments in fluctuating-value Federated Funds. For publicly traded equity securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on quoted market prices. For investments in Federated Funds that are publicly available, the securities are valued under the market approach through the use of quoted market prices available in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy. For certain investments in Federated Funds and/or Separate Accounts that are not publicly available but for which the NAV is calculated daily and for which there are no redemption restrictions, the securities are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. These investments are included in the NAV Practical Expedient column in the table above. Investments—Affiliates and Other—Debt Securities Investments—Affiliates and Other—Debt Securities primarily represent domestic bonds held in Separate Accounts. The fair value of these securities may include observable market data such as valuations provided by independent pricing services after considering factors such as the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions (Level 2). (b) Fair Value Measurements on a Nonrecurring Basis Federated did not hold any assets or liabilities measured at fair value on a nonrecurring basis at September 30, 2018. (c) Fair Value Measurements of Other Financial Instruments The fair value of Federated's debt is estimated by management using observable market data (Level 2). Based on this fair value estimate, the carrying value of debt appearing on the Consolidated Balance Sheets approximates 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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