Fair Value Measurements

12 Months Ended

Jul. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

10. Fair Value Measurements

The Company adopted new accounting guidance on fair value measurements on August 1, 2008 as it relates to financial assets and liabilities. The Company adopted the new accounting guidance on fair value measurements for its nonfinancial assets and liabilities on August 1, 2009. The accounting guidance applies to other accounting pronouncements that require or permit fair value measurements, defines fair value based upon an exit price model, establishes a framework for measuring fair value, and expands the applicable disclosure requirements. The accounting guidance indicates, among other things, that a fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.

The accounting guidance on fair value measurements establishes a fair market value hierarchy for the pricing inputs used to measure fair market value. The Company’s assets and liabilities measured at fair market value are classified in one of the following categories:

Level 1 — Assets or liabilities for which fair value is based on quoted market prices in active markets for identical instruments as of the reporting date.

Level 2 — Assets or liabilities for which fair value is based on valuation models for which pricing inputs were either directly or indirectly observable.

Level 3 — Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates.

The following tables set forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at July 31, 2012, and July 31, 2011, according to the valuation techniques the Company used to determine their fair values.

	Fair Value Measurements Using Inputs Considered as
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value		Balance Sheet Classification
July 31, 2012:
Trading Securities	$	12,676	$	—	$	—	$	12,676	Other assets
Foreign exchange contracts — cash flow hedges		—		1,156		—		1,156	Prepaid expenses and other current assets
Foreign exchange contracts		—		78		—		78	Prepaid expenses and other current assets
Total Assets	$	12,676	$	1,234	$	—	$	13,910
Foreign exchange contracts— cash flow hedges	$	—	$	210	$	—	$	210	Other current liabilities
Foreign exchange contracts — net investment hedges		—		71		—		71	Other current liabilities
Foreign exchange contracts		—		—		—		—	Other current liabilities
Foreign currency denominated debt — net investment hedge		—		99,081		—		99,081	Long term obligations, less current maturities
Total Liabilities	$	—	$	99,362	$	—	$	99,362
July 31, 2011:
Trading Securities	$	10,897	$	—	$	—	$	10,897	Other assets
Foreign exchange contracts — cash flow hedges		—		16		—		16	Prepaid expenses and other current assets
Foreign exchange contracts		—		3		—		3	Prepaid expenses and other current assets
Total Assets	$	10,897	$	19	$	—	$	10,916
Foreign exchange contracts — cash flow hedges	$	—	$	830	$	—	$	830	Other current liabilities
Foreign exchange contracts – net investment hedges		—		5,295		—		5,295	Other current liabilities
Foreign exchange contracts		—		2		—		2	Other current liabilities
Foreign currency denominated debt — net investment hedge		—		107,985		—		107,985	Long term obligations, less current maturities
Total Liabilities	$	—	$	114,112	$	—	$	114,112

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Trading Securities: The Company’s deferred compensation investments consist of investments in mutual funds. These investments were classified as Level 1 as the shares of these investments trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis.

Foreign currency exchange contacts: The Company’s foreign currency exchange contracts were classified as Level 2, as the fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield curves and foreign currency exchange rates. See Note 12, “Derivatives and Hedging Activities” for additional information.

Foreign currency denominated debt — net investment hedge: The Company’s foreign currency denominated debt designated as a net investment hedge was classified as Level 2, as the fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield curves and foreign currency exchange rates. See Note 12, “Derivatives and Hedging Activities” for additional information.

There have been no transfers of assets or liabilities between the fair value hierarchy levels, outlined above, during the fiscal years ended July 31, 2012 and 2011.

The Company’s financial instruments, other than those presented in the disclosures above, include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term and long-term debt. See Note 5, “Long-Term Obligations” for fair value of long-term debt. The fair values of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximated carrying values because of the short-term nature of these instruments.

During fiscal 2012, goodwill with a carrying amount of $163,702 in the former North/South Asia reporting unit was written down to its estimated implied fair value of $48,014, resulting in a non-cash impairment charge of $115,688. In order to arrive at the implied fair value of goodwill, the Company assigned the fair value to all of the assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Intangible assets consisted of customer lists, and were valued using the income approach based upon customers in existence at the valuation date. After assigning fair value to the assets and liabilities of the reporting unit, the result was the implied fair value of goodwill of $48,014, which represented a Level 3 asset measured at fair value on a nonrecurring basis subsequent to its original recognition.