Fair Value Measurement

12 Months Ended

Jan. 29, 2023

Assets and liabilities measured at fair value on a recurring basis

As of January 29, 2023 and January 30, 2022, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis:


	January 29, 2023		Level 1		Level 2		Level 3		Balance Sheet Classification
	(In thousands)
Money market funds	$	568,000	$	568,000	$	—	$	—	Cash and cash equivalents

Term deposits	8		—		8		—		Cash and cash equivalents
Forward currency contract assets	16,707		—		16,707		—		Prepaid expenses and other current assets
Forward currency contract liabilities	25,625		—		25,625		—		Other current liabilities


	January 30, 2022		Level 1		Level 2		Level 3		Balance Sheet Classification
	(In thousands)
Money market funds	$	38,475	$	38,475	$	—	$	—	Cash and cash equivalents

Term deposits	318,698		—		318,698		—		Cash and cash equivalents
Forward currency contract assets	19,077		—		19,077		—		Prepaid expenses and other current assets
Forward currency contract liabilities	18,985		—		18,985		—		Other current liabilities

The Company has short-term, highly liquid investments classified as cash equivalents, which are invested in money market funds and term deposits. The Company records cash equivalents at their original purchase prices plus interest that has accrued at the stated rate.

The fair values of the forward currency contract assets and liabilities are determined using observable Level 2 inputs, including foreign currency spot exchange rates, forward pricing curves, and interest rates. The fair values consider the credit risk of the Company and its counterparties. The Company's Master International Swap Dealers Association, Inc., Agreements and other similar arrangements allow net settlements under certain conditions. However, the Company records all derivatives on its consolidated balance sheets at fair value and does not offset derivative assets and liabilities.

Assets and liabilities measured at fair value on a non-recurring basis

The Company has also recorded lease termination liabilities at fair value on a non-recurring basis, determined using Level 3 inputs based on remaining lease rentals and reduced by estimated sublease income.

As of January 29, 2023, the Company recorded impairment charges for goodwill, intangible assets, and property and equipment, as disclosed in Note 8. Impairment of Goodwill and Other Assets. That note includes details on the discounted cash flow model used to estimate fair value, which is a Level 3 valuation technique.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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