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FAIR VALUE DISCLOSURES | 3 Months Ended
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Sep. 30, 2013
Fair Value Disclosures [Abstract] |
FAIR VALUE DISCLOSURES | NOTE 3. FAIR VALUE DISCLOSURES Accounting Standards Codification (ASC) 820, Fair Value Measurement and Disclosures, 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. ASC 820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value and requires companies to disclose the fair value of their financial instruments according to a fair value hierarchy (i.e., Levels 1, 2, and 3 inputs, as defined below). The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Additionally, companies are required to provide enhanced disclosures regarding instruments in the Level 3 category (which have inputs to the valuation techniques that are unobservable and require significant management judgment), including a reconciliation of the beginning and ending values separately for each major category of assets or liabilities. Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories: Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities at the reporting date. Since valuations are based on quoted prices that are readily and regularly available in an active market, value of these products does not entail a significant degree of judgment. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. For actively traded securities, the Company values investments using the closing price of the securities on the exchange or market on which the securities principally trade. If the security is not actively traded, it is valued based on the last bid and/or ask quotation. Securities that are not traded on an exchange or market are generally valued at cost, monitored by management and fair value adjusted as considered necessary. The Company values the mutual funds, offshore funds and a venture capital investment at net asset value. The following table presents fair value measurements, as of September 30, 2013, for the three major categories of U.S. Global’s investments measured at fair value on a recurring basis:
|  | Fair Value Measurement using (in thousands) |
|  | September 30, 2013 |
|  | Quoted Prices |  |  | Significant Other Inputs |  |  | Significant Unobservable Inputs |  |  | Total |
|  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  |  |
Trading securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  | $ | 23 |  |  | $ | - |  |  | $ | - |  |  | $ | 23 |
Offshore fund |  |  | - |  |  |  | 902 |  |  |  | - |  |  |  | 902 |
Mutual funds |  |  | 3,942 |  |  |  | - |  |  |  | - |  |  |  | 3,942 |
Total trading securities |  |  | 3,965 |  |  |  | 902 |  |  |  | - |  |  |  | 4,867 |
Available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  |  | 1,642 |  |  |  | - |  |  |  | 97 |  |  |  | 1,739 |
Venture capital investments |  |  | - |  |  |  | - |  |  |  | 163 |  |  |  | 163 |
Offshore fund |  |  | - |  |  |  | 4,778 |  |  |  | - |  |  |  | 4,778 |
Mutual funds |  |  | 1,544 |  |  |  | - |  |  |  | - |  |  |  | 1,544 |
Total available-for-sale securities |  |  | 3,186 |  |  |  | 4,778 |  |  |  | 260 |  |  |  | 8,224 |
Total Investments |  | $ | 7,151 |  |  | $ | 5,680 |  |  | $ | 260 |  |  | $ | 13,091 |
Approximately 55 percent of the Company’s financial assets measured at fair value are derived from Level 1 inputs including SEC-registered mutual funds and equity securities traded on an active market, 43 percent of the Company’s financial assets measured at fair value are derived from Level 2 inputs, including an investment in an offshore fund, and the remaining two percent are Level 3 inputs. The Company recognizes transfers between levels at the end of each quarter. The Company did not transfer any securities between Level 1 and Level 2 during the three months ended September 30, 2013. In Level 2, the Company has an investment in an offshore fund with a fair value of $902,009, based on the net asset value per share, which invests in companies in the energy and natural resources sectors. The Company may redeem this investment on the first business day of each month after providing a redemption notice at least forty-five days prior to the proposed redemption date. The Company also has a Level 2 investment in an offshore fund with a fair value of $4,778,290, based on the net asset value per share, which invests in dividend-paying equity and debt securities of companies located around the world. The Company may redeem this investment on the first business day of each month after providing a redemption notice at least forty-five days prior to the proposed redemption date. The Company has provided notice of redemption and anticipates that the redemption will be fulfilled by receiving securities in-kind before 2013 calendar year end. In Level 3, the Company held investments in a private company and one venture capital investment. These investments are measured at fair value using significant unobservable inputs at September 30, 2013. Fair value is based on cost adjusted for known changes in value. The Level 3 venture capital investment has a fair value of approximately $162,841 and primarily invests in companies in the medical and medical technology sectors. The Company may redeem this investment with general partner approval. As of September 30, 2013, the Company has an unfunded commitment of $62,500 related to this investment. The Company also has an investment in restricted share of a private sports entertainment company with a fair value of approximately $97,000. The following table presents additional information about investments measured at fair value on a recurring basis and for which the Company has utilized significant unobservable inputs to determine fair value:
Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis |
|  | Three Months Ended September 30, |
|  | 2013 |  |  | 2012 |
(Dollars in Thousands) |  | Venture Capital Investments |  |  | Common Stock |  |  | Venture Capital Investments |  |  | Common Stock |
Beginning Balance |  | $ | 163 |  |  | $ | 95 |  |  | $ | 168 |  |  | $ | - |
Return of capital |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total gains or losses (realized/unrealized) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings (investment income) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Included in other comprehensive income |  |  | - |  |  |  | 2 |  |  |  | - |  |  |  | - |
Purchases, sales, issuances, and settlements |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Transfers in and/or out of Level 3 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Ending Balance |  | $ | 163 |  |  | $ | 97 |  |  | $ | 168 |  |  | $ | - |

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13504-108611 + Details
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