Rue 21 2010 Annual Report Download - page 61

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The FASB issues ASUs to amend the authoritative literature in Accounting Standards Codification (ASC).
There have been a number of ASUs to date that amend the original text of ASC. Except for ASU 2010-09 listed
above, those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not
applicable to the Company or (iv) are not expected to have a significant impact on the Company.
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 and cash equivalents of $50,111 and $26,751 as of January 29, 2011 and January 30, 2010, respectively,
are reported at fair value utilizing Level 1 inputs.
•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 January 29, 2011 and January 30,
2010:
Cash and cash Equivalents
Carrying
Amount
Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs
(level 3)
Fair Value Measurements at January 29, 2011
Cash .......................... $50,111 $50,111 $— $—
Total........................... $50,111 $50,111 $— $—
Cash and cash Equivalents
Carrying
Amount
Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs
(level 3)
Fair Value Measurements at January 30, 2010
Cash .......................... $26,751 $26,751 $— $—
Total........................... $26,751 $26,751 $— $—
57
rue21, inc. and subsidiary
Notes to Consolidated Financial Statements — (continued)