Fair Value Measurements

6 Months Ended

Sep. 30, 2021

We measure fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a three tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets and liabilities; Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities or prices quoted in inactive markets; and Level 3, defined as unobservable inputs that are significant to the fair value of the asset or liability, and for which little or no market data exists, therefore requiring management to utilize its own assumptions to provide its best estimate of what market participants would use in valuing the asset or liability.

We did not have any material financial assets or liabilities measured at fair value on a recurring basis using Level 3 inputs as of September 30, 2021 or March 31, 2021. Our non-financial assets, such as goodwill, intangible assets and property and equipment, are measured at fair value on a nonrecurring basis, generally when there is a transaction involving those assets such as a purchase transaction, a business combination or an adjustment for impairment. No non-financial assets were measured at fair value at September 30, 2021 and March 31, 2021. As a result of the reorganization during the six months ended September 30, 2021, the Company reallocated goodwill to the three new reporting units discussed in Note 1, Description of Business and Summary of Significant Accounting Policies.

The following tables present the Company’s financial assets that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy:


	As of September 30, 2021
	(In thousands)
	Amortized Cost		Gross Unrealized Loss		Gross Unrealized Gain		Estimated Fair Value
Assets:
Level 1:
Money market funds	$	11,068	$	—	$	—	$	11,068
Securities held in deferred compensation plan (1)	833		—		34		867
Subtotal	11,901		—		34		11,935
Level 2:
Commercial paper	4,295		—		—		4,295
Subtotal	4,295		—		—		4,295
Total	$	16,196	$	—	$	34	$	16,230

Liabilities:
Level 1:
Deferred compensation plan liabilities (2)	$	836	$	—	$	34	$	870
Subtotal	836		—		34		870
Level 3:
Contingent consideration (3)	600		—		—		600
Subtotal	600		—		—		600
Total	$	1,436	$	—	$	34	$	1,470


	As of March 31, 2021
	(In thousands)
	Amortized Cost		Gross Unrealized Loss		Gross Unrealized Gain		Estimated Fair Value
Assets:
Level 1:
Money market funds	$	4,676	$	—	$	—	$	4,676
Securities held in deferred compensation plan (1)	89				11		100
Subtotal	4,765		—		11		4,776

Level 2:
Commercial paper	4,999		—		—		4,999
Corporate notes and bonds	1,085		—		—		1,085
US Treasuries	4,600		—		—		4,600
Subtotal	10,684		—		—		10,684
Total	$	15,449	$	—	$	11	$	15,460

Liabilities:
Level 1:
Deferred compensation plan liabilities (2)	$	100	$	—	$	11	$	111
Subtotal	100		—		11		111
Level 3:
Contingent consideration (3)	600		—		—		600
Subtotal	600		—		—		600
Total	$	700	$	—	$	11	$	711

(1) Included in prepaid expenses and other current assets on the Company’s consolidated balance sheet.

(2) Included in accrued payroll and related expenses on the Company’s consolidated balance sheet.

(3) Included short-term portion in accrued liabilities and long-term portion in other long-term liabilities on the Company’s consolidated balance sheet.

Unrealized losses related to investments are due to interest rate fluctuations as opposed to credit quality. In addition, we do not intend to sell, and it is not more likely than not that, we would be required to sell, any of our investments before recovery of their cost basis. As a result, there is no other-than-temporary impairment for these investments as of September 30, 2021.

- 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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