Fair Value Measurements

12 Months Ended

Sep. 30, 2016

4FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable.

Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.

Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.


The following table summarizes the Company’s financial assets measured at fair value as of September 30, 2016:

		Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	12,637	$	-	$	-	$	12,637

The following table summarizes the Company’s financial assets measured at fair value as of October 2, 2015:

		Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	11,441	$	-	$	-	$	11,441

Rabbi trust assets are classified as trading securities and are comprised of marketable debt and equity securities that are marked to fair value based on unadjusted quoted prices in active markets. The rabbi trust assets are owed by the Company to certain officers and other employees under the Company’s non-qualified deferred compensation plan. This offsetting deferred compensation liability is reported at fair value as well and is included in “Other liabilities” in the Company’s Consolidated Balance Sheets. The mark-to-market adjustments are recorded in “Other (income) expense, net” in the accompanying Consolidated Statements of Operations.


The effect of changes in the fair value of financial instruments on the Consolidated Statements of Operations for the years ended September 30, 2016, October 2, 2015 and October 3, 2014, was:


	Location of (income) loss recognized in Statement of Operations	2016		2015		2014

Rabbi trust assets	Other (income) expense, net	$	(624)	$	638	$	(703)

Certain assets and liabilities are measured at fair value on a non-recurring basis in periods subsequent to their initial recognition. During 2016, the Company recorded a $6,197 impairment charge on goodwill held by the Diving business reducing its carrying value to $0, its implied fair value. The charge is reflected in “Goodwill and other intangible assets impairment.” During 2014, the Company recorded a $2,000 impairment charge in “Goodwill and other intangible assets impairment” on a trademark held by the Outdoor Equipment business reducing its fair value to $3,400. The Company also recorded an impairment charge on goodwill held by the Outdoor Equipment business during 2014. A $6,475 charge was included in “Goodwill and other intangible assets impairment” related to this impairment during 2014 reducing its carrying value to its implied fair value of $0. See further discussion of these impairment charges at Note 1 of these Notes to Consolidated Financial Statements.

The following table summarizes the Company’s assets measured at fair value on a non-recurring basis as of September 30, 2016 and the losses recognized as a result of this measurement in year then ended.



		Level 1		Level 2		Level 3		Losses incurred

Goodwill	$	-	$	-	$	-	$	6,197

No assets or liabilities were measured at fair value on a non-recurring basis in 2015.

- 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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