Note 4 - Fair Value of Financial Instruments

9 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Text Block]

4.     FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of certain financial instruments, such as accounts receivable and accounts payable, approximate their fair value due to the short-term nature of their underlying terms.

The Company's non-financial assets measured at fair value on a non-recurring basis include assets and liabilities acquired in a business combination, goodwill and intangible assets, and other long-lived assets written down to fair value. To measure fair value for such assets, the Company uses techniques including an income approach, a market approach, and/or appraisals (Level 3 inputs). The income approach is based on a discounted cash flow analysis (“DCF”) and calculates the fair value by estimating the after-tax cash flows attributable to an asset, group of assets or a reporting unit and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate. Assumptions used in the DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates, and the amount and timing of expected future cash flows. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in the DCF are based on estimates of the weighted-average cost of capital of a market participant. Such estimates are derived from analysis of peer companies and consider the industry weighted average return on debt and equity from a market participant perspective. A market approach values a business by considering the prices at which shares of capital stock of reasonably comparable companies are trading in the public market, or the transaction price at which similar companies have been acquired. If comparable companies are not available, the market approach is not used.