Fair Value Measures and Disclosures (Policies)

9 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

    We have certain financial instruments which consist of cash and cash equivalents, cash held for customers, marketable securities, accounts receivable, contract assets, equity securities, accounts payable, customer account liabilities, certain derivative instruments, assets related to deposits made to fund future requirements associated with Israeli severance arrangements and debt drawn on our Credit Facility (as defined in Note 12). Fair value information for each of these instruments is as follows:

•    Cash and cash equivalents, cash held for customers, accounts receivable, contract assets, accounts payable and customer account liabilities fair values approximate their carrying values, due to the expected duration of these instruments.

•    Marketable securities classified as held to maturity, all of which mature within one year, are recorded at amortized cost, which at March 31, 2022 and June 30, 2021, approximated fair value.

•    Marketable debt securities classified as available for sale, which are comprised of U.S. treasury securities, are recorded at fair value. Unrealized gains and losses are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity, net of tax. We use the specific identification method to determine any realized gains or losses from the sale of our marketable debt securities classified as available for sale. We assess securities with an amortized cost basis in excess of estimated fair value for credit loss. As of March 31, 2022 and June 30, 2021, the unrealized losses associated with available for sale securities were not material. No credit loss has been recorded as we do not intend to sell the investments prior to recovering their amortized costs basis.

•    The fair value of our interest rate swaps are based on the present value of projected cash flows that will occur over the life of the instruments, after considering certain contractual terms and counterparty credit risk.

•     We hold certain other investments accounted for at fair value. The estimated fair value of these investments, which are in a private equity fund, are Level 3 measurements as they rely on significant unobservable inputs and depending on the specific nature of the investment, consider such factors as pricing models that consider a comparative analysis of acquisitions and pricing multiples from market participants as well as discounted cash flow analyses. We also have investments for which there is no readily determinable fair value. The carrying value of these investments was $14.4 million and $12.0 million at March 31, 2022 and June 30, 2021, respectively, and are reported as a component of other assets. The increase in the carrying value of investments was due to a fair value adjustment recorded on an investment during the three months ended March 31, 2022. The fair value adjustment was based on an observable price change arising from a recent financing transaction by the investee. Investments for which we cannot readily determine fair value are recorded at cost, less impairment (if any), plus or minus adjustments for observable price changes.

•     We have borrowings of $130 million against our Credit Facility. The fair value of these borrowings, which are classified as Level 2, approximates their carrying value at March 31, 2022 as the instrument carries a variable rate of interest which reflects current market rates.