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FAIR VALUE MEASUREMENTS
12 Months Ended
Jul. 31, 2013
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
The Company records certain of its financial assets and liabilities at fair value, which is the price that would be received to sell an asset or be 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 current authoritative guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). Authoritative guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Use of observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Use of inputs other than quoted prices included in Level 1, which are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3: Use of inputs that are unobservable.
The following table presents, for each of these hierarchy levels, the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of July 31, 2013:
 
 
 
Fair Value Measurements
 
 
 
As of
Jul. 31, 2013
 
Level 1
 
Level 2
 
Level 3
Financial assets carried at fair value
 

 
 

 
 

 
 

Money market funds
$
6,404

 
$
6,404

 
$

 
$

Available-for-sale securities:
 

 
 

 
 

 
 

Equity securities
366

 
366

 

 

Debt securities:
 

 
 

 
 

 
 

Corporate
32,393

 

 
32,393

 

U.S. Treasury
11,543

 

 
11,543

 

Federal Agency
20,642

 

 
20,642

 

Mortgage-backed
5,990

 

 
5,990

 

Derivative financial instruments:
 

 
 

 
 

 
 

Foreign exchange forward contracts
301

 

 
301

 

Financial liabilities carried at fair value
 

 
 

 
 

 
 

Derivative financial instruments:
 

 
 

 
 

 
 

Foreign exchange forward contracts
3,066

 

 
3,066

 


The following table presents, for each of these hierarchy levels, the Company’s financial assets and liabilities that are measured at fair value as of July 31, 2012:
 
 
 
Fair Value Measurements
 
 
 
As of
Jul. 31, 2012
 
Level 1
 
Level 2
 
Level 3
Financial assets carried at fair value
 

 
 

 
 

 
 

Money market funds
$
4,684

 
$
4,684

 
$

 
$

Available-for-sale securities:
 

 
 

 
 

 
 

Equity securities
206

 
206

 

 

Debt securities:
 

 
 

 
 

 
 

Corporate
32,378

 

 
32,378

 

U.S. Treasury
8,610

 

 
8,610

 

Federal Agency
27,231

 

 
27,231

 

Municipal government
1,004

 

 
1,004

 

Mortgage-backed
6,392

 

 
6,392

 

Derivative financial instruments:
 

 
 

 
 

 
 

Foreign exchange forward contracts
3,778

 

 
3,778

 

Financial liabilities carried at fair value
 

 
 

 
 

 
 

Derivative financial instruments:
 

 
 

 
 

 
 

Foreign exchange forward contracts
1,457

 

 
1,457

 



The Company’s money market funds and equity securities are valued using quoted market prices and, as such, are classified within Level 1 of the fair value hierarchy.
 
The fair value of the Company’s investments in debt securities has been determined utilizing third party pricing services and verified by management. The pricing services use inputs to determine fair value which are derived from observable market sources including reportable trades, benchmark curves, credit spreads, broker/dealer quotes, bids, offers, and other industry and economic events. These investments are included in Level 2 of the fair value hierarchy.
 
The fair value of the Company’s foreign currency forward contracts were valued using pricing models, with all significant inputs derived from or corroborated by observable market data such as yield curves, currency spot and forward rates and currency volatilities. These investments are included in Level 2 of the fair value hierarchy.
 
The Company completed its annual goodwill impairment test for all reporting units as discussed in Note 1, Accounting Policies and Related Matters and determined that no impairment existed. In addition, the Company had no impairment of goodwill in the prior year. In connection with the annual goodwill impairment test, the Company estimates the fair value of its reporting units using a market approach employing Level 3 inputs as defined in the fair value hierarchy.

In connection with the acquisitions in the first and third quarters of fiscal year 2012, the Company recorded the fair value of the intangible assets acquired, which were valued using the income approach. The valuation employed level 3 inputs, as defined in the fair value hierarchy.