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Fair Value Measurement
 6 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurement Fair Value Measurement
The Company measures and records certain assets and liabilities at fair value on a recurring basis. Authoritative guidance issued by the FASB establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels:
 
Level 1: Quoted market prices in active markets for identical assets or liabilities;
Level 2: Inputs other than Level 1 inputs that are either directly or indirectly observable; and
Level 3: Unobservable inputs developed using estimates and assumptions developed by the Company, which reflect those that a market participant would use.
 
During the year ended September 30, 2018, and as a result of the acquisition of Machinio, the Company recorded contingent consideration which was measured at fair value (Level 3). At September 30, 2019, the Company estimated the fair value of the contingent consideration using a Monte Carlo simulation. The simulation estimated Machinio's adjusted EBITDA over the calendar year 2019 earn-out period using a market-based volatility factor and market interest rates resulting in an average EBITDA. A present value factor was applied based on the expected settlement date of the contingent consideration. At March 31, 2020, the calendar year 2019 earn-out period was complete and the liability has been paid in full.

The changes in the earn-out liability measured at fair value using Level 3 inputs to determine fair value for the six months ended March 31, 2020 are as follows:

(in thousands)Contingent Consideration
Balance at September 30, 2019
$4,800  
Change in fair value
200  
Settlement(5,000) 
Balance at March 31, 2020
$—  

The increase in the fair value of the earn-out liability is due to Machinio's full attainment of its actual adjusted EBITDA target for the calendar year 2019 earn-out period. The expense for the change in fair value was included in Other operating expenses in the Consolidated Statements of Operations. The earn-out liability was paid in full during the three months ended March 31, 2020.

The Company also has short-term investments of $10.0 million and $30.0 million at March 31, 2020 and September 30, 2019, respectively, in certificates of deposit with maturities of six months or less, and interest rates between 1.76% and 2.50%. These assets were measured at fair value at March 31, 2020 and September 30, 2019 and were classified as Level 1 assets within the fair value hierarchy.

The Company’s financial assets and liabilities not measured at fair value are cash and cash equivalents (which includes cash and commercial paper with original maturities of less than 90 days), accounts receivable, a promissory note and accounts payable. The Company believes the carrying values of these instruments approximate fair value.
At March 31, 2020 and September 30, 2019, the Company did not have any assets or liabilities measured at fair value on a non-recurring basis.