Fair Value Measurements

12 Months Ended

Jun. 30, 2013

Fair Value Measurements

Fair Value Measurements

Note 10. Fair Value Measurements

Cash and cash equivalents, receivables, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although no trading market exists, the Company believes that the carrying amount of its debt approximates fair value due to its variable nature. The Company’s investments in non-marketable equity instruments of private companies are carried at cost and are periodically assessed for other-than-temporary impairment, when an event or circumstances indicate that an other-than-temporary decline in value may have occurred. The Company’s remaining financial assets and liabilities are measured and recorded at fair value (see table below). The Company’s non-financial assets, such as goodwill, intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Goodwill and indefinite lived intangibles are also tested for impairment annually, as required under the accounting standards.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the guidance are described below:

Level 1	Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2	Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3	Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents by level, within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2013:

			Fair Value MeasurementsAssets (Liabilities)
	Carrying Value		Level 1		Level 2		Level 3
					(in thousands)
Assets (liabilities):
Trading securities held in a “rabbi trust” (1)	$	1,708	$	1,708	$	—	$	—
Non-performance promissory note (2)	205		—		—		205
	$	1,913	$	1,708	$	—	$	205

(1) Trading securities held in a rabbi trust are measured using quoted market prices at the reporting date and are included in Other assets in the consolidated balance sheets.  The Company established a Non-qualified Deferred Compensation Plan (Note 14 — Employee Retirement Plans) for certain members of senior management in fiscal 2009. Deferred compensation is invested in mutual funds held in a “rabbi trust” which is restricted for payment to participants of the NQDC Plan.

(2) Refer to Note 4. Acquisitions and dispositions — Sale and franchise of Fannie May retail stores. Included in Other assets on the consolidated balance sheets.

The following table presents, by level, within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis as of July 1, 2012:

				Fair Value MeasurementsAssets (Liabilities)
	Carrying Value			Level 1		Level 2			Level 3
						(in thousands)
Assets (liabilities):
Trading securities held in a “rabbi trust” (1)	$	1,143		$	1,143	$	—		$	—
Fair value of non-performance promissory note (2)	205			—		—			205
Interest rate swap	(7		)	—		(7		)	—
	$	1,341		$	1,143	$	(7	)	$	205

(1) Trading securities held in a rabbi trust are measured using quoted market prices at the reporting date and are included in Other assets in the consolidated balance sheets. (Note 14 — Employee Retirement Plans).

(2) Refer to Note 4. Acquisitions and dispositions — Sale and franchise of Fannie May retail stores. Included in other assets on the consolidated balance sheets.