XML 33 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
Fair Value Measurements
 12 Months Ended
Sep. 30, 2011
Fair Value Measurements [Abstract]  
Fair Value Measurements

4. FAIR VALUE MEASUREMENTS

At September 30, 2011, there was no difference between the carrying value and fair market value of the Company's cash equivalents. For certain financial instruments, including accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their relatively short maturities.

 

On October 1, 2008, the Company adopted guidance issued by ASC 820-10, "Fair Value Measurements and Disclosures". This guidance defines fair value 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, and establishes a three-level fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value as described below:

 

  •  

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

  •  

Level 2: Inputs from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities.

 

  •  

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As described further in Note 14, the Company had outstanding warrants issued in 2006 that were subject to an anti-dilution reset provision prior to August 2010. In accordance with ASC 815-40, the Company reclassified the fair value of the warrant from equity to a liability as of October 1, 2009. The warrant liability was required to be measured at fair value on a recurring basis each quarter-end during the year ended September 30, 2010 through June 30, 2010. In August 2010 when, due to changes in certain terms, the warrants were no longer required to be classified as liabilities, at which time the carrying value of the warrants was remeasured and reclassified to equity. The Company used the Black-Scholes valuation model for estimating the fair value of the warrants, which the Company determined to be Level 2 inputs, as the assumptions used were based on significant other observable inputs.

As of September 30, 2011 and 2010, the Company had no financial instruments that are required to be measured at fair value on a recurring basis.