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Derivatives, Investments, and Fair Value Measurements | 3 Months Ended
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Nov. 30, 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 Accounting Standards Codification ("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 November 30, 2019 and August 31, 2019 according to the valuation techniques we used to determine their fair values:
| Fair Value at |  | Fair Value Hierarchy
(in thousands) | November 30, 2019 |  | Level 1 |  | Level 2 |  | Level 3
Assets that fund deferred compensation: |  |  |  |  |  |  |
Domestic equity funds | $ | 444 |  |  | $ | 345 |  |  | $ | 99 |  |  | $ | — |
International equity funds | 104 |  |  | 37 |  |  | 67 |  |  | — |
Fixed income funds | 163 |  |  | 53 |  |  | 110 |  |  | — |
Total assets at fair value | $ | 711 |  |  | $ | 435 |  |  | $ | 276 |  |  | $ | — |
| 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 |  |  | $ | — |
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 primarily 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, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 for additional information regarding these plans. The proportion of the assets that will fund options which expire within a year are included in Prepaid expenses and other assets in the accompanying Condensed 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 rate swap contract, which effectively fixed our interest rate on our $300.0 million term loan agreement ("Term Loan") for a notional amount that reduced 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%. In the first quarter of Fiscal 2020, we exited the swap contract prior to its expiration on December 8, 2020. The fair value of the interest rate swap was classified as Level 2 as it was determined based on observable market data. The asset was included in Other assets on the Condensed Consolidated Balance Sheets. The change in value was recorded to Accumulated other comprehensive loss on the Condensed Consolidated Balance Sheets since the interest rate swap was designated for hedge accounting. Assets and Liabilities that are measured at Fair Value on a Nonrecurring Basis Our non-financial assets, which include 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 has occurred, the asset is required to be recorded at the estimated fair value. No impairments were recorded for non-financial assets in the first quarter of Fiscal 2020 or the first quarter of Fiscal 2019. 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 derivatives and fair value of assets and liabilities. + 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 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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