Rue 21 2012 Annual Report Download - page 53

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rue21, inc.
Notes to Consolidated Financial Statements — Continued
Note 2 — Fair Value Measurements
The FASB’s authoritative guidelines require the categorization of assets and liabilities into three levels based
upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of
fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as
follows:
•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. The Company’s cash,
cash equivalents and short term investments of $63.5 million and $72.0 million as of February 2, 2013 and
January 28, 2012, respectively, are reported at fair value utilizing Level 1 inputs. The carrying value of these
instruments approximate fair value because of their short-term maturity.
•Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar
assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the
asset or liability. The Company determined that the fair value measurements related to the impaired long
lived assets disclosed in Note 1 are derived from significant unobservable inputs. These non-financial assets
are measured on a non-recurring basis when events and circumstances warrant.
In accordance with ASC 820, the following tables represent the fair value hierarchy for the Company’s
financial assets (cash equivalents) measured at fair value on a recurring basis as of February 2, 2013 and January 28,
2012:
Fair Value Measurements at February 2, 2013
Carrying
Amount
Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs
(level 3)
(in thousands)
Cash and cash Equivalents
Cash ........................... $43,519 $43,519 $— $—
Short Term Investments ............... $20,000 $20,000 $— $—
Total .............................. $63,519 $63,519 $— $—
Fair Value Measurements at January 28, 2012
Carrying
Amount
Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs
(level 3)
(in thousands)
Cash and cash Equivalents
Cash ........................... $41,960 $41,960 $— $—
Short Term Investments ........... $30,000 $30,000 $— $—
Total .............................. $71,960 $71,960 $— $—
49