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Fair Value Measurements | 12 Months Ended
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Jun. 30, 2017
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 14. Fair Value Measurements Fair value is defined as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Financial assets and liabilities are measured at fair value using the three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1— Quoted prices in active markets for identical assets or liabilities. Level 2— Significant observable inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 3— Unobservable inputs for which there is little or no market data available, and that are significant to the overall fair value measurement, are employed that require the reporting entity to develop its own assumptions. In assessing the fair value of financial instruments at June 30, 2017 and 2016, we used a variety of methods and assumptions that were based on estimates of market conditions and risks existing at the time. Current Assets and Liabilities We consider the carrying amounts of current assets and current liabilities to be representative of their fair value because of the current nature of these items. Letters of Credit We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The carrying values of these letters of credit are considered to be representative of their fair values because of the nature of the instruments. Debt We record debt, including term loans and revolver balances, at book value in our consolidated financial statements. We believe the carrying value of the debt is approximately equal to its fair value, due to the variable nature of the instruments. Contingent Consideration on Acquisitions We determine the fair value of contingent consideration on acquisitions based on contractual terms, our current forecast of performance factors related to the acquired business and an applicable discount rate. Derivatives We determine the fair value of derivative instruments based upon pricing models using observable market inputs for these types of financial instruments, such as spot and forward currency translation rates.
As of June 30 |  |  | 2017 |  |  | 2016 |
|  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Derivatives asset |  |  |  | $ | — |  |  |  |  | $ | 2,686 |  |  |  |  | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | 2,655 |  |  |  |  | $ | — |  |
Contingent consideration on acquisitions |  |  |  | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | (7,644) |  |  |  |  | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | (6,745) |  |
Fair Value of Level 3 Assets (Liabilities) The table below provides a summary of the changes in the fair value of Level 3 assets (liabilities):
|  |  | 2017 |  |  | 2016 |
Balance, June 30, 2016 |  |  |  | $ | (6,745) |  |  |  |  | $ | (5,465) |  |
Adjustment to contingent consideration |  |  |  |  | 404 |  |  |  |  |  | — |  |
Acquisition-related accrued interest |  |  |  |  | (1,373) |  |  |  |  |  | (1,476) |  |
Payment |  |  |  |  | 70 |  |  |  |  |  | 196 |  |
Balance, June 30, 2017 |  |  |  | $ | (7,644) |  |  |  |  | $ | (6,745) |  |
For a detailed discussion on the fair value of our pension plan assets, see “—Employee Benefit Plans.”

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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