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FINANCIAL INSTRUMENTS
 12 Months Ended
Oct. 31, 2011
FINANCIAL INSTRUMENTS
5. 
FINANCIAL INSTRUMENTS

The carrying amounts for trade receivables, payables and short-term debt approximate their fair values.  We also have financial instruments in the form of foreign currency forward exchange contracts as described in Note 1 of Notes to Consolidated Financial Statements.  The U.S. Dollar equivalent notional amount of these contracts was $126.4 million and $89.1 million at October 31, 2011 and 2010, respectively.  The fair value of Derivative Assets recorded on our Consolidated Balance Sheets at October 31, 2011 and 2011 was $1.2 million and $905,000, respectively.  The fair value of Derivative Liabilities recorded on our Consolidated Balance Sheets at October 31, 2011 and 2010 was $1.6 million and $2.1 million, respectively.

The future value of the foreign currency forward exchange contracts and the related currency positions are subject to offsetting market risk resulting from foreign currency exchange rate volatility.  The counterparties to these contracts are substantial and creditworthy financial institutions.  We do not consider either the risk of counterparty non-performance or the economic consequences of counterparty non-performance as material risks.

FASB fair value guidance established a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value.  These tiers include: Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exist, therefore requiring an entity to develop its own assumptions.

In accordance with this guidance, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value as of October 31, 2011 (in thousands):
 
   
Assets
    
Liabilities
  
   
October 31,
    
October 31,
    
October 31,
    
October 31,
  
   
2011
    
2010
    
2011
    
2010
  
Level 1
                        
Deferred compensation
   $ 741     $ 674     $ -     $ -  
                                 
Level 2
                                
Derivatives
   $ 1,197     $ 905     $ 1,609     $ 2,123  

Included in Level 1 assets are mutual fund investments under a nonqualified deferred compensation plan.   We estimate the fair value of these investments on a recurring basis using market prices which are readily available.  Included as Level 2 fair value measurements are derivative assets and liabilities related to gains and losses on foreign currency forward exchange contracts entered into with a third party.  We estimate the fair value of these derivatives on a recurring basis using foreign currency exchange rates obtained from active markets.

During fiscal 2011, we did not have any significant non-recurring measurements of nonfinancial assets and nonfinancial liabilities.