Fair Value Measurements

6 Months Ended

Feb. 29, 2020

Note 10 – Fair Value Measurements

The following table presents the Company’s financial assets and liabilities measured at fair value, based upon the level within the fair value hierarchy in which the fair value measurements fall, as of February 29, 2020, February 28, 2019, and August 31, 2019. There were no transfers between any levels for the periods presented.

	February 29, 2020
($ in thousands)	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	101,272	$	—		$	—	$	101,272
Marketable securities:
Corporate bonds		—		14,555			—		14,555
U.S. treasury securities		—		4,185			—		4,185
Derivative assets		—		247			—		247

	February 28, 2019
($ in thousands)	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	102,778	$	—		$	—	$	102,778
Derivative assets		—		426			—		426
Derivative liabilities		—		(22	)		—		(22	)

	August 31, 2019
($ in thousands)	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	127,204	$	—		$	—	$	127,204
Derivative assets		—		1,112			—		1,112

During the second quarter of fiscal 2020, the Company made a net investment of $18.7 million in marketable securities, consisting of United States treasury bonds and investment grade corporate bonds. The marketable securities are classified as available-for-sale and are carried at fair value with the change in unrealized gains and losses reported as a separate component on the condensed consolidated statements of comprehensive income (loss) until realized. The Company determines fair value using data points that are observable, such as quoted prices and interest rates. The amortized cost of the investments approximates fair value. Investment income is recorded within other (expense) income on the condensed consolidated statements of operations. As of February 29, 2020, approximately 55% of the Company’s marketable securities investments mature within one year and 45% mature within one to three years.

There were no required fair value adjustments for assets and liabilities measured at fair value on a non-recurring basis for the six months ended February 29, 2020 or February 28, 2019.

- 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.

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