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DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
assigned purchase agreement. All deposits are attributed to the total purchase price of $59.5 million,
which is payable in increments through 2013. If the agreement is terminated prior to the delivery date,
up to $3.5 million of the deposits are non-refundable.
The Company is involved in legal proceedings incidental to the normal conduct of its business.
Although the outcome of any pending legal proceedings cannot be predicted with certainty,
management believes that adequate insurance coverage is maintained and that the ultimate resolution
of these matters will not have a material adverse effect on the Company’s liquidity, financial position or
results of operations.
15. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date (an exit price). ASC 820,
Fair Value Measurement and Disclosures, outlines a valuation framework and creates a fair value
hierarchy in order to increase the consistency and comparability of fair value measurements and the
related disclosures and prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or
indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting
entity to develop its own assumptions.
Assets measured at fair value on a recurring basis as of January 28, 2012 and January 29, 2011 are set
forth in the table below:
Description Level 1 Level 2 Level 3
As of January 28, 2012
Assets:
Deferred compensation plan assets held in trust (see
Note 13) $ 27,102 $ - $ -
Total assets $ 27,102 $ - $ -
As of January 29, 2011
Assets:
Unregistered common stock of GSI Commerce (see
Note 12) $ 10,789 $ - $ -
Deferred compensation plan assets held in trust (see
Note 13) 18,641 - -
Total assets $ 29,430 $ - $ -
The Company uses quoted prices in active markets to determine the fair value of the aforementioned
assets determined to be Level 1 instruments. There were no transfers between Level 1, 2 or 3 during
fiscal 2011.
The fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other
liabilities approximated book value due to the short-term nature of these instruments at both
January 28, 2012 and January 29, 2011.
Dick’s Sporting Goods, Inc. 2011 Annual Report 73