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Fair Value Measurements
 12 Months Ended
Aug. 31, 2012
Fair Value Measurements  
Fair Value Measurements

 

15. Fair Value Measurements

        The following table presents the carrying amounts and estimated fair values of the Company's financial instruments at August 31, 2012 and 2011 (in thousands). Fair value is defined as the amount 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.

 
   August 31, 2012   August 31, 2011  
 
   Carrying
Amount 		  Fair
Value 		  Carrying
Amount 		  Fair
Value 		 

Financial assets:

                          

Cash and cash equivalents

   $ 47,228   $ 47,228   $ 83,619   $ 83,619  

Short-term investments

     8,831     8,831     —     —  

Receivables (including related parties)

     4,916     4,916     5,480     5,480  

Other assets (non-derivatives)

     1,011     1,011     1,051     1,051  

Financial liabilities:

                          

Notes payable to banks

     1,585     1,585     972     972  

Payables (including related parties)

     10,156     10,156     11,223     11,223  

Long-term debt (including current installments)

   $ 5,920   $ 5,920   $ 7,086   $ 7,086  

        The fair values of the financial instruments shown in the above table as of August 31, 2012 and 2011 represent the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. Those fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects management's own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by management based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, available observable and unobservable inputs.

        The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

  • •
    Cash, cash equivalents, short-term investments, receivables and payables (including related parties) and notes payable to banks: The carrying amounts, at face value or cost plus accrued interest, approximate fair value because of the short maturity of these instruments.

    •
    Other assets (non-derivatives) include primarily value-added tax ("VAT") refund receivables, refundable deposits, and restricted time deposits. The fair value of VAT refund receivables approximates the carrying amount because of the short maturity. The fair value of refundable deposits and restricted time deposits with no fixed maturity is based on the carrying amount.

    •
    Long-term debt: The fair value of the Company's variable rate long-term debt is estimated based on the prevailing market rate adjusted by the Company's credit spread. Management believes the carrying amount of its variable rate long-term debt approximates the fair value.         



        The following table presents fair value measurements of assets and liabilities that were measured at fair value on a nonrecurring basis as of August 31, 2012 (in thousands):

 
   August 31,
2012 		  Quoted prices in
active markets for
identical assets
(Level 1) 		  Significant
other
observable
inputs
(Level 2) 		  Significant
unobservable
inputs
(Level 3) 		  Total
losses 		 

Property, plant and equipment

   $ 46,450   $ —   $ —   $ 46,450   $ 7,507  

        In accordance with ASC 360-10, property, plant and equipment with a carrying amount of $54.0 million was written down to its fair value of $46.5 million, resulting in an impairment charge of $7.5 million, which was included in the consolidated statement of operations for the year ended August 31, 2012.

        The Company's consolidated financial statements as of and for the year ended August 31, 2011 did not include any nonrecurring fair value measurements relating to assets or liabilities.