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Fair Value of Financial Instruments
12 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

The Company’s financial instruments generally include cash and cash equivalents, short-term investments, trade accounts, financing receivables and accounts payable. Due to the short-term maturities of cash and cash equivalents, trade accounts receivable, financing receivables and accounts payable, the carrying amounts approximate fair value on the respective balance sheet dates. The valuation technique used to measure the fair value of the contingent consideration was derived from models utilizing market observable inputs.

The Company measures its short-term investments and contingent consideration at fair value on a recurring basis.

The following tables present the fair value of the Company’s short-term investments and contingent consideration by valuation hierarchy and input (in thousands):

 

 

 

AS OF SEPTEMBER 30, 2022

 

 

 

Quoted Prices
in Active
Markets for
Identical
Assets
 (Level 1)

 

 

Significant
Other Unobservable
(Level 2)

 

 

Significant
Unobservable
(Level 3)

 

 

Totals

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

 

 

$

894

 

 

$

 

 

$

894

 

Total assets

 

$

 

 

$

894

 

 

$

 

 

$

894

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration liabilities

 

$

 

 

$

 

 

$

175

 

 

$

175

 

Total liabilities

 

$

 

 

$

 

 

$

175

 

 

$

175

 

 

 

 

AS OF SEPTEMBER 30, 2021

 

 

 

Quoted Prices
in Active
Markets for
Identical
Assets
 (Level 1)

 

 

Significant Other
Observable
(Level 2)

 

 

Significant
Unobservable
(Level 3)

 

 

Totals

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

 

 

$

9,496

 

 

$

 

 

$

9,496

 

Total assets

 

$

 

 

$

9,496

 

 

$

 

 

$

9,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Current portion

 

$

 

 

$

 

 

$

807

 

 

$

807

 

Non-current portion

 

 

 

 

 

 

 

 

5,210

 

 

 

5,210

 

Total liabilities

 

$

 

 

$

 

 

$

6,017

 

 

$

6,017

 

 

 

Assets and Liabilities Measured on a Nonrecurring Basis

The measurements utilized to determine the implied fair value of the Company's Emerging Markets reporting unit as of September 30, 2022 represented significant unobservable inputs (Level 3). See Note 11 for discussion of these inputs.

 

The following table summarizes changes in the fair value of the Company’s Level 3 financial instruments for the fiscal years ended September 30, 2022 and 2021:

 

Contingent Consideration balance at October 1, 2020

 

$

10,962

 

Fair value adjustments

 

 

(3,524

)

Payment of contingent consideration

 

 

(1,421

)

Balance at September 30, 2021

 

 

6,017

 

Fair value adjustments

 

 

(5,035

)

Payment of contingent consideration

 

 

(807

)

Balance at September 30, 2022

 

$

175

 

 

Adjustments to the fair value of the contingent consideration are based on internal estimates and management assessments regarding potential future scenarios. The Company believes its estimates and assumptions are reasonable; however, there is significant judgment involved. Also see Note 18.