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64
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
securities. Due to the use of discounted expected future cash flows to derive the fair value of the Convertible Notes, the
Company reclassified its investment as a Level 3 investment (see Note 16) during the fiscal quarter ended July 28, 2012.
During the first quarter of 2013, the Company recorded $4.3 million related to the partial recovery of its fully impaired
investment in JJB Sports. The Company has received, and may receive in future periods, additional immaterial recoveries.
16. 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 February 1, 2014 and February 2, 2013 are set forth in the table below:
Description Level 1 Level 2 Level 3
As of February 1, 2014
Assets:
Deferred compensation plan assets held in trust (1) $ 49,351 $ — $ —
Total assets $ 49,351 $ — $ —
As of February 2, 2013
Assets:
Deferred compensation plan assets held in trust (1) $ 36,871 $ — $ —
Total assets $ 36,871 $ — $ —
(1) Consists of investments in various mutual funds made by eligible individuals as part of the Company's deferred
compensation plan (See Note 13).
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 February 1, 2014 and February 2, 2013.
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 Levels 1 and 2 during fiscal 2013 and 2012. The Company did not hold
any Level 3 financial assets or liabilities as of February 1, 2014 and February 2, 2013. The Company's policy for recognition of
transfers between levels of the fair value hierarchy is to recognize any transfer at the end of the fiscal quarter in which the
determination to transfer was made.