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Fair Value Measurements
 9 Months Ended
May 31, 2012
Fair Value Measurements [Abstract]  
Fair Value Measurements

Note 3. Fair Value Measurements

Financial Assets and Liabilities

The Company categorizes its financial assets and liabilities measured at fair value into a hierarchy that categorizes fair value measurements into the following three levels based on the types of inputs used in measuring their fair value:

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

Level 2: Observable market-based inputs or observable inputs that are corroborated by market data; and

Level 3: Unobservable inputs reflecting the Company’s own assumptions.

Financial assets measured at fair value on a recurring basis are summarized below (in thousands):

 

                                 
    May 31, 2012  
             Total                        Level 1                     Level 2                     Level 3          

Assets:

                                

Money market funds

   $ 4,534     $ —       $ 4,534     $ —    

Term deposits

     503       —         503       —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 5,037     $ —       $ 5,037     $ —    
   

 

 

    

 

 

    

 

 

    

 

 

  
   
    August 31, 2011  
    Total     Level 1     Level 2     Level 3  

Assets:

                                

Money market funds

   $ —       $ —       $ —       $ —    

Term deposits

     533       —         533       —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 533     $ —       $ 533     $ —    
   

 

 

    

 

 

    

 

 

    

 

 

  

 

Money market funds are highly liquid investments classified as cash equivalents and term deposits are held-to-maturity investments classified as short-term investments in the Company’s condensed consolidated balance sheets at May 31, 2012 and August 31, 2011. These securities are valued based on third party quotations of similar assets in active markets, and are thus classified as Level 2 within the fair value hierarchy.

There were no transfers between Level 1 and Level 2 fair value measurements during the nine months ended May 31, 2012 and 2011.

The carrying values of trade accounts receivable and accounts payable approximate their fair values due to their short-term maturities. The estimated fair value of long-term debt, including current maturities, was $10.9 million at August 31, 2011 based on discounted future cash flows using current market interest rates. No such long-term debt was outstanding at May 31, 2012.

Nonfinancial Assets and Liabilities

The Company’s nonfinancial assets and liabilities are recognized at fair value subsequent to initial recognition when they are deemed to be impaired. There were no nonfinancial assets and liabilities deemed to be impaired and measured at fair value on a nonrecurring basis as of May 31, 2012 and August 31, 2011.