ASC Topic 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy.

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

Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable.

Level 3 – Unobservable inputs developed using the company’s estimates and assumptions, which reflect those that market participants would use.

The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

The following tables present information about assets measured at fair value on a recurring basis:

Fair value measurements as of January 31, 2021 using:

Quoted prices

Significant

in active

other

Significant

markets for

observable

unobservable

identical assets

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Premier Money Market Fund

7,771

N/A

7,771

Inflation Protected Bond Funds

2,893

N/A

2,893

Short Term Bond Funds

2,655

N/A

2,655

Growth Allocation Fund

299

N/A

299

Moderate Allocation Fund

N/A

Other

N/A

Fair value measurements as of February 2, 2020 using:

Quoted prices

Significant

in active

other

Significant

markets for

observable

unobservable

identical assets

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Premier Money Market Fund

6,334

N/A

6,334

Short Term Bond Funds

4,743

N/A

4,743

Inflation Protected Bond Funds

2,837

N/A

2,837

Strategic Income Fund

1,001

N/A

1,001

Growth Allocation Funds

239

N/A

239

Moderate Allocation Fund

138

N/A

138

Other

N/A

Fair value measurements as of May 3, 2020 using:

Quoted prices

Significant

in active

other

Significant

markets for

observable

unobservable

identical assets

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Premier Money Market Fund

7,496

N/A

7,496

Short Term Bond Funds

923

N/A

923

Growth Allocation Funds

219

N/A

219

Moderate Allocation Fund

N/A

Other

N/A

Our short-term investments classified as available for sale consisted primarily of short-term and inflation protected bond mutual funds and had an accumulated unrealized gain totaling $30,000, $48,000, and $9,000 as of January 31, 2021, February 2, 2020, and May 3, 2020, respectively. Our short-term investments classified as available for sale were recorded at their fair values of $5.5 million, $7.6 million, and $923,000 as of January 31, 2021, February 2, 2020, and May 3, 2020, respectively. As of January 31, 2021, February 2, 2020, and May 3, 2020, the fair value of our short-term investments approximated their cost basis.

Our investments classified as held-to-maturity consisted of investment grade U.S. corporate bonds, foreign bonds, and government bonds with original maturities that range from 2 to 10 years, all of which have remaining maturities of less than 2 years as of January 31, 2021. These investments were classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity. Our held-to-maturity investments were recorded as either current or noncurrent on our Consolidated Balance Sheets, based on the maturity date in relation to the respective reporting period, and were recorded at amortized cost.

As of January 31, 2021, February 2, 2020, and May 3, 2020, our held-to-maturity investments recorded at amortized cost and totaled $10.3 million, $5.4 million, and $6.3 million, respectively. The fair value of our held-to-maturity investments as of January 31, 2021, February 2, 2020, and May 3, 2020, totaled $10.3 million, $5.4 million, and $6.4 million, respectively.

Our bond investments were classified as level 2 as they were traded over the counter within a broker network and not on an active market. The fair value of our bond investments was determined based on a published source that provided an average bid price. The average bid price was based on various broker prices that were determined based on market conditions, interest rates, and the rating of the respective bond investment.

Current Expected Credit Loses (“CECL”)- Available for Sale and Held-To-Maturity Investments

As of May 4, 2020, we did not have an allowance for credit losses related to our short-term available for sale and held-to-maturity investments, which are comprised mostly of fixed income securities that are predominantly high-grade U.S. and foreign corporate bonds, U.S. Treasury bonds, and short-term mutual bond funds.

As a result of our adoption of Topic 326 effective May 4, 2020, we determined that our credit loss exposure was immaterial due to the short-term nature of our mutual bond funds, and we have experienced historically low unrealized losses and gains during past reporting periods. In addition, it is not our intention to sell, and it is not likely that we will be required to sell, our held-to-maturity investments before the recovery of their amortized cost basis.

As of January 31, 2021, we reported an accumulated unrealized gain of $30,000 associated with our short-term investments classified as available for sale. As mentioned above, it is not our intention to sell nor is it likely that we will be required to sell, our held-to-maturity investments before the recovery of their amortized cost basis. Accordingly, we did not record any credit loss expense during the nine-month period ending January 31, 2021.

We have a rabbi trust to set aside funds for participants of our deferred compensation plan (the “Plan”), which enables its participants to credit their contributions to various investment options of the Plan. The investments associated with the rabbi trust consist of a money market fund and various mutual funds that are classified as available for sale.

The long-term investments associated with our rabbi trust were recorded at their fair values of $8.2 million, $7.8 million, and $7.8 million as of January 31, 2021, February 2, 2020, and May 3, 2020, respectively. The long-term investments associated with our rabbi trust had an accumulated unrealized gain of $87,000 and $56,000, as of January 31, 2021 and February 2, 2020, respectively, and an accumulated unrealized loss $19,000 as of May 3, 2020. The fair value of our long-term investments associated with our rabbi trust approximates their cost basis.

The carrying amount of our cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses approximates fair value because of the short maturity of these financial instruments.

The following table presents information about assets and liabilities measured at fair value on a nonrecurring basis related to a discontinued operation as of February 2, 2020:

Fair value measurements as of February 2, 2020 using:

Quoted prices

Significant

in active

other

Significant

markets for

observable

unobservable

identical assets

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Goodwill (Notes 3 and 8)

N/A

2,442

Tradename (Notes 3 and 7)

N/A

4,121

Liabilities:

Contingent Consideration – Earn-Out Obligation (Note 3)

N/A

—

The goodwill was recorded at fair market value using the discounted cash flow method that used significant unobservable inputs and was classified as level 3. The tradename was recorded at fair market value using the relief from royalty method that used significant unobservable inputs and was classified as level 3. See Notes 7 and 8 of the consolidated financial statements for further details regarding our assessment of impairment, conclusions reached, and the performance of our quantitative impairment tests.

The following table presents information about assets measured at fair value on a nonrecurring basis related to continuing operations as of May 3, 2020:

Fair value measurements at May 3, 2020 using:

Quoted prices

Significant

in active

other

Significant

markets for

observable

unobservable

identical assets

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Goodwill (Note 8)

N/A

—

Tradename (Note 7)

N/A

540

Goodwill was recorded at fair market value using a discounted cash flow method that used significant unobservable inputs and was classified as level 3. See Note 8 of the consolidated financial statements for further details regarding our assessment of impairment, conclusions reached, and the performance of our quantitative impairment test.

Tradename was recorded at fair market value using the relief from royalty method that used significant unobservable inputs and was classified as level 3. See Note 7 of the consolidated financial statements for further details regarding our assessment of impairment, conclusions reached, and the performance of our quantitative impairment test.

The following table presents information about assets and liabilities measured at fair value on a nonrecurring basis related to a discontinued operation as of May 3, 2020:

	Fair value measurements at May 3, 2020 using:
	Quoted prices	Significant
	in active	other	Significant
	markets for	observable	unobservable
	identical assets	inputs	inputs
(amounts in thousands)	Level 1	Level 2	Level 3	Total
Assets:
Goodwill (Notes 3 and 8)	N/A	N/A	N/A	N/A
Tradename (Notes 3 and 7)	N/A	N/A	N/A	N/A
Liabilities:
Contingent Consideration – Earn-Out Obligation (Note 3)	N/A	N/A	N/A	N/A

During the fourth quarter of fiscal 2020, goodwill and tradename were recorded at fair market value based on the expected selling price of our entire ownership in eLuxury in comparison to its carrying amount. As disclosed in Note 3 of the consolidated financial statements, effective March 31, 2020, we sold our entire ownership interest in eLuxury to its former noncontrolling interest holder, resulting in the elimination of the home accessories segment at such time. Based on the terms of the sale agreement, we did not receive any consideration for eLuxury’s net assets associated with the sale of our entire ownership interest in eLuxury. We believe the selling price represents a significant observable input and was classified as level 2.

See Notes 7 and 8 of the consolidated financial statements for further details regarding our assessment of impairment, conclusions reached, and the performance of our quantitative impairment tests.