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Derivatives, Investments and Fair Value Measurements | 12 Months Ended
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Aug. 31, 2019
Fair Value Disclosures [Abstract] |
Derivatives, Investments and Fair Value Measurements | Derivatives, Investments, and Fair Value Measurements Assets and Liabilities that are Measured at Fair Value on a Recurring Basis We account for fair value measurements in accordance with ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measurement, and expands disclosure about fair value measurement. The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows: Level 1 - Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 - Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:
• | Quoted prices for similar assets or liabilities in active markets;
• | Quoted prices for identical or similar assets in nonactive markets;
• | Inputs other than quoted prices that are observable for the asset or liability; and
• | Inputs that are derived principally from or corroborated by other observable market data.
Level 3 - Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis at August 31, 2019 and August 25, 2018 according to the valuation techniques we used to determine their fair values:
| Fair Value at |  | Fair Value Hierarchy
(in thousands) | August 31, 2019 |  | Level 1 |  | Level 2 |  | Level 3
Assets that fund deferred compensation: |  |  |  |  |  |  |
Domestic equity funds | $ | 373 |  |  | $ | 288 |  |  | $ | 85 |  |  | $ | — |
International equity funds | 101 |  |  | 45 |  |  | 56 |  |  | — |
Fixed income funds | 155 |  |  | 54 |  |  | 101 |  |  | — |
Interest rate swap contract | 90 |  |  | — |  |  | 90 |  |  | — |
Total assets at fair value | $ | 719 |  |  | $ | 387 |  |  | $ | 332 |  |  | $ | — |
| Fair Value at |  | Fair Value Hierarchy
(in thousands) | August 25, 2018 |  |  | Level 1 |  | Level 2 |  | Level 3
Assets that fund deferred compensation: |  |  |  |  |  |  |
Domestic equity funds | $ | 1,143 |  |  | $ | 1,114 |  |  | $ | 29 |  |  | $ | — |
International equity funds | 139 |  |  | 120 |  |  | 19 |  |  | — |
Fixed income funds | 223 |  |  | 132 |  |  | 91 |  |  | — |
Interest rate swap contract | 1,959 |  |  | — |  |  | 1,959 |  |  | — |
Total assets at fair value | $ | 3,464 |  |  | $ | 1,366 |  |  | $ | 2,098 |  |  | $ | — |
The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Assets that fund deferred compensation Our assets that fund deferred compensation are marketable equity securities measured at fair value using quoted market prices and primarily consist of equity-based mutual funds. These securities are classified as Level 1 as they are traded in an active market for which closing stock prices are readily available. These securities fund the Executive Share Option Plan and the Executive Deferred Compensation Plan. Refer to Note 10, Employee and Retiree Benefits. The proportion of the assets that will fund options which expire within a year are included in Prepaid expenses and other assets on the Consolidated Balance Sheets. The remaining assets are classified as non-current and are included in Other assets. Interest Rate Swap Contract On January 23, 2017, we entered into an interest swap contract, which effectively fixed our interest rate on our $300.0 million loan agreement ("Term Loan") for a notional amount that reduces each December during the swap contract. As of August 31, 2019, we had $120.0 million of our Term Loan fixed at an interest rate of 5.32%. As of August 25, 2018, we had $170.0 million of our Term Loan fixed at an interest rate of 5.32%. The swap contract expires on December 8, 2020. The fair value of the interest rate swap is classified as Level 2 as it is determined based on observable market data. The asset is included in Other assets on the Consolidated Balance Sheets. The change in value is recorded to Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets since the interest rate swap has been designated for hedge accounting. Assets and Liabilities that are measured at Fair Value on a Nonrecurring Basis Our non-financial assets, which includes goodwill, intangible assets, and property, plant, and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required, we must evaluate the non-financial asset for impairment. If an impairment occurs, the asset is required to be recorded at the estimated fair value. No impairments were recorded for non-financial assets in Fiscal 2019, 2018, and 2017. Fair Value of Financial Instruments Our financial instruments, other than those presented in the disclosures above, include cash, receivables, accounts payable, other payables, and long-term debt. The fair values of cash, receivables, accounts payable, and other payables approximated carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. See Note 9, Long-Term Debt, for information about the fair value of our long-term debt.

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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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