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Fair Value of Financial Instruments
 3 Months Ended
Sep. 27, 2012
Fair Value of Financial Instruments

Note 11 – Fair Value of Financial Instruments

Authoritative guidance issued by the Financial Accounting Standards Board defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

 

Level 1

   

–  Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.

Level 2

   

–  Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3

   

–  Unobservable inputs for which there is little or no market data available.

The carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at September 27, 2012, June 28, 2012 and September 29, 2011 because of the short-term maturities and nature of these balances.

The carrying value of our revolving credit facility borrowings approximates fair value at September 27, 2012, June 28, 2012 and September 29, 2011 because of the short term maturity and nature of this balance. In addition, there has been no significant change in our inherent credit risk.

The estimated fair value of our long-term debt, including current maturities, was $52,781 at September 27, 2012 and the related carrying value was $48,214. The estimated fair value of our long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been no significant changes in the underlying assets securing our long-term debt and the rates on the variable portion of our long-term debt were reset during the previous twelve months.