XML 57 R17.htm IDEA: XBRL DOCUMENT

Fair Value Measurements

3 Months Ended

Apr. 30, 2020

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract]

NOTE 10 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•

Level 1 – Quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

•

Level 3 – Unobservable inputs based on the Company’s assumptions.

The guidance requires the use of observable market data if such data is available without undue cost and effort.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of April 30, 2020 and 2019 and January 31, 2020 (in thousands):

		Fair Value at April 30, 2020
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	133	$	—	$	—	$	133
Short-term investment	Other current assets		148		—		—		148
SERP assets - employer	Other non-current assets		964		—		—		964
SERP assets - employee	Other non-current assets		41,759		—		—		41,759
Defined benefit plan assets	Other non-current liabilities		—		—		22,799		22,799
Hedge derivatives	Other current assets		—		5		—		5
Total		$	43,004	$	5	$	22,799	$	65,808
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	41,735	$	—	$	—	$	41,735
Hedge derivatives	Accrued liabilities		—		29		—		29
Total		$	41,735	$	29	$	—	$	41,764

		Fair Value at January 31, 2020
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	184	$	—	$	—	$	184
Short-term investment	Other current assets		156		—		—		156
SERP assets - employer	Other non-current assets		988		—		—		988
SERP assets - employee	Other non-current assets		45,256		—		—		45,256
Defined benefit plan assets	Other non-current liabilities		—		—		24,227		24,227
Hedge derivatives	Other current assets		—		347		—		347
Total		$	46,584	$	347	$	24,227	$	71,158
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	45,264	$	—	$	—	$	45,264
Contingent consideration	Other non-current liabilities		—		—		—		—
Total		$	45,264	$	—	$	—	$	45,264

		Fair Value at April 30, 2019
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	178	$	—	$	—	$	178
Short-term investment	Other current assets		152		—		—		152
SERP assets - employer	Other non-current assets		978		—		—		978
SERP assets - employee	Other non-current assets		41,268		—		—		41,268
Defined benefit plan assets	Other non-current liabilities		—		—		31,202		31,202
Hedge derivatives	Other current assets		—		8		—		8
Total		$	42,576	$	8	$	31,202	$	73,786
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	41,268	$	—	$	—	$	41,268
Hedge derivatives	Accrued liabilities		—		509		—		509
Contingent consideration	Other non-current liabilities		—		—		16,884		16,884
Total		$	41,268	$	509	$	16,884	$	58,661

The fair values of the Company’s available-for-sale securities are based on quoted prices. The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of a percent calculated annually. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the Company’s liability to the employees in the plan for their vested balances. The hedge derivatives are entered into by the Company principally to reduce its exposure to Swiss Franc and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates. The carrying amount of debt approximated fair value as of April 30, 2020, January 31, 2020, and April 30, 2019, due to the availability and floating rate for similar instruments.

The Company sponsors a pension plan in Switzerland which was amended to a defined benefit plan effective December 31, 2018. The plan covers certain international employees and is based on years of service and compensation on a career-average pay basis. The assets within the plan are classified as a Level 3 asset within the fair value hierarchy and consist of an investment in pooled assets and include separate employee accounts that are invested in equity securities, debt securities and real estate. The values of the separate accounts invested are based on values provided by the administrator of the funds that cannot be readily derived from or corroborated by observable market data. The value of the assets is part of the funded status of the defined benefit plan and included in other non-current liabilities in the consolidated balance sheets at April 30, 2020 and April 30, 2019.

The contingent purchase price liability related to the acquisition of MVMT Watches, Inc., owner of the MVMT brand, is considered a Level 3 liability. Based on updated revenue and EBITDA (as defined in the acquisition agreement) performance expectations during the earn-out period for MVMT, the Company remeasured the contingent consideration to zero at January 31, 2020. During the three months ended April 30, 2019, the liability was revalued with an increase in the fair value of the liability of $0.2 million and was recorded in the Consolidated Statement of Operations.

There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

- 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 + Details