3. SIGNIFICANT ACCOUNTING POLICIES

Following are certain remarkable accounting principles and disclosures.

Marketable Securities

Marketable securities at June 30, 2014 consist of bond funds. ASC 320, Investments in Debt and Equity Securities, requires certain investments be recorded at fair value or amortized cost. The appropriate classification of the investments in marketable equity is determined at the time of purchase and re-evaluated at each balance sheet date. As of June 30, 2014, the Company’s marketable securities were classified as available-for-sale, which are carried at fair value, with unrealized gains and losses reported as other comprehensive income within the stockholders’ equity section of the accompanying consolidated balance sheets. The cost of marketable securities sold is determined on a specific identification basis. The fair value of marketable securities is based on quoted market prices based on Level 1 inputs — quoted prices (unadjusted) for identical assets or liabilities in active markets.

There have been no realized gains or losses related to marketable securities for the nine month periods ended June 30, 2014 or 2013. Marketable securities held at June 30, 2014 have a cost basis of approximately $505,000.

Fair Value Accounting

ASC 820 clarifies the definition of fair value, describes methods used to appropriately measure fair value, and expands fair value disclosure requirements, but does not change existing guidance as to whether or not an instrument is carried at fair value.

US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

	·	Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
	·	Level 2 – Include other inputs that are directly or indirectly observable in the marketplace.
	·	Level 3 – Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The Company classifies its marketable securities as available-for-sale, which are reported at fair value. Unrealized gains and losses, net of the related income tax effect, if any, on available-for-sale securities are included in comprehensive income and are reported as accumulated other comprehensive income in stockholders’ equity. Realized gains and losses from securities classified as available for-sale are included in income. The Company measures the fair value of its marketable securities based on quoted prices for identical securities in active markets, or Level 1 inputs. As of June 30, 2014, available-for-sale securities consisted of the following:

			Gross
(in thousands)	Cost		Unrealized		Fair
Available for Sale	Basis		Gains		Value
Tax-Advantaged Bond Fund	$	505	$	81	$	586

In accordance with ASC Topic 320, Investments — Debt and Equity Securities , the Company reviews its marketable securities to determine whether a decline in fair value of a security below the cost basis is other than temporary. Should the decline be considered other than temporary, the Company writes down the cost basis of the security and include the loss in current earnings as opposed to an unrealized loss in comprehensive income.No losses for other than temporary impairments in the Company’s marketable securities portfolio were recognized during the quarter ended June 30, 2014.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

(in thousands)	Carrying
June 30, 2014	Amount		Level 1		Level 2		Level 3
Marketable securities	$	586	$	586	$	-	$	-

(in thousands)	Carrying
September 30, 2013	Amount		Level 1		Level 2		Level 3
Marketable securities	$	555	$	555	$	-	$	-

Discontinued Operations

In prior consolidated financial statements, the Company has disclosed certain discontinued operations – nightclubs that the Company has closed or sold. Those discontinued operations have now become immaterial; therefore, the Company has eliminated the disclosure in the accompanying consolidated financial statements.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.