Fair Value Measurements

FAIR VALUE MEASUREMENTS

Financial Assets and Liabilities- Financial assets and liabilities measured at fair value on a recurring basis consisted of the following:



	January 28, 2017								January 30, 2016
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in thousands)
Financial Assets:
Cash and cash equivalents	$	110,657	$	110,657	$	—	$	—	$	32,495	$	32,495	$	—	$	—
Short-term investments	98,530		2,446		96,084		—		226,027		2,127		223,900		—
Long-term investments	77,904		431		77,473		—		71,953		181		71,772		—
Total Financial Assets	$	287,091	$	113,534	$	173,557	$	—	$	330,475	$	34,803	$	295,672	$	—
Financial Liabilities:
Contingent consideration	$	33,204	$	—	$	—	$	33,204	$	—	$	—	$	—	$	—
Total Financial Liabilities	$	33,204	$	—	$	—	$	33,204	$	—	$	—	$	—	$	—

The short-term and long-term investments categorized as Level 2 were valued using a market-based approach using inputs such as prices of similar assets in active markets. See Note 15, Commitments and Contingencies, for the estimated fair value (categorized as Level 3) of the contingent consideration liability and changes recognized during fiscal 2016.

We have financial assets and liabilities not required to be measured at fair value on a recurring basis, which primarily consist

of accounts receivables, note receivable from Town Shoes, and accounts payables. The carrying value of accounts receivables and accounts payables approximated their fair values due to their short-term nature. As of January 28, 2017, the fair value of the note receivable from Town Shoes was $45.7 million, compared to the carrying value of $53.1 million. As of January 30, 2016, the fair value of the note receivable from Town Shoes was $33.3 million, compared to the carrying value of $44.2 million. We estimated the fair value of the note receivable based upon current interest rates offered on similar instruments. The change in fair value is based on the change in comparable rates on similar instruments. Based on our intention and ability to hold the note until maturity or the exercise of the put/call option, the carrying value is not other-than-temporarily impaired.

Non-Financial Assets- During fiscal 2016, 2015, and 2014, we recognized impairment losses primarily on store leasehold improvements in the DSW segment of $0.2 million, $1.0 million, and $5.1 million, respectively. We determined that the carrying value exceeded the expected future cash flows and recorded an impairment after determining fair value based on the discounted future cash flow analysis using a discount rate determined by management based on historical performance and expectations of future performance (Level 3 inputs). After the impairment losses were recorded, the remaining fair value of the assets are immaterial.

- 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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