Fair Value Measurements

12 Months Ended

Sep. 30, 2015

21 FAIR VALUE MEASUREMENTS

The Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures, for assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and the credit risk of the Company and counterparties to the arrangement.

ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. ASC 820 establishes and prioritizes the following three levels of inputs that may be used to measure fair value:

Level 1

Quoted prices in active markets for identical assets or liabilities.

Level 2

Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3

Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments consist of cash, cash equivalents, accounts receivable, accounts payable, foreign currency forward contracts, interest rate swaps, and certain liabilities related to business acquisitions primarily resulting from earn-out features. The carrying amounts of cash, cash equivalents, accounts receivable and accounts payable approximate their respective fair values because of the short maturity and nature of these items. The fair value of the foreign currency forward contracts and interest rate swaps is determined by the estimated cash flows of those contracts and swaps. The fair values of the acquisition-related liabilities are based on discounted valuations of commercial assumptions made by Company management of stipulations governed in the underlying purchase agreements.

ASSETS/LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis for the periods under report:

Assets and Liabilities Measured at Fair Value (Recurring Basis)		September 30,
		2015
		Quoted pricesin activemarkets foridenticalinstruments(Level 1)		Significantotherobservableinputs(Level 2)		Significantunobservableinputs(Level 3)		Total
(In millions)				Foreign exchange
Assets
Cash equivalents(money market funds)	$	213.9	$	-	$	-	$	213.9
Derivative assets		-		0.6		-		0.6
Liabilities
Derivative liabilities		-		(0.1)		-		(0.1)
Business combination-related liabilities		-		-		(7.1)		(7.1)
Total	$	213.9	$	0.5	$	(7.1)	$	207.3

Assets and Liabilities Measured at Fair Value (Recurring Basis)		September 30,
		2014
		Quoted pricesin activemarkets foridenticalinstruments(Level 1)		Significantotherobservableinputs(Level 2)		Significantunobservableinputs(Level 3)		Total
(In millions)				Foreign exchange
Assets
Cash equivalents(money market funds)	$	211.2	$	-	$	-	$	211.2
Liabilities
Derivative liabilities		-		(1.5)		-		(1.5)
Business combination-related liabilities		-		-		(14.2)		(14.2)
Total	$	211.2	$	(1.5)	$	(14.2)	$	195.5

The change in the fair value of the business acquisition-related liabilities was $7.1 million for the period under report, and a total for all acquisitions of $6.0 million income was recorded in other income (expense) in the income statement for the fiscal year ended September 30, 2015.

In the Company’s September 30, 2015 and 2014 Consolidated Balance Sheet, derivative assets and derivative liabilities are classified as prepaid expenses and other current assets and accrued liabilities and deferred income, respectively.

The Company did not elect the fair value option for any other eligible financial instruments.

- 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.

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