Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.10.0.1
Fair Value Measurements
 3 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements

The Company complies with the provisions of FASB ASC 820 “Fair Value Measurements” for its financial and non-financial assets and liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. The majority of the carrying amounts of the Company’s assets and liabilities including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities as of December 31, 2018 and September 30, 2018, approximate their fair value because of the immediate or short term maturity of these financial instruments. The carrying amounts reported for long-term debt approximates fair value as the Company’s borrowings with commercial lenders are at interest rates that vary with market conditions and fixed rates that approximate market rates for similar obligations. The majority of our non-financial instruments, which include inventories and property and equipment, are not required to be measured at fair value on a recurring basis. The Company has certain assets classified as Assets Held for Sale, which have been recorded at the lower of carrying value or the estimated fair value less costs to sell. Additionally, the Company has two derivatives identified during the adoption of ASC 610-20, which relate to the gain on the sale of the sugarcane land on November 21, 2014 (see Note 7. “Derivative Asset and Derivative Liabilities/Deferred Gain on Sale”).
 
ASC 820 clarifies that fair value is an exit price representing the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy which 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 the 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, such as internally-developed valuation models which require the reporting entity to develop its own assumptions.

The following table represents certain assets held for sale as of December 31, 2018, which have been measured at fair value on a non-recurring basis for trailers and a recurring basis for derivative asset and derivative liabilities:

(in thousands)
Fair Value Hierarchy
Carrying Value
Adjustment to Fair Value
Fair Value
Assets:
 
 
 
 
Trailers
Level 3
$
606

$
150

$
456

Derivative asset
Level 3
3,553

284

3,269

     Total assets
 
$
4,159

$
434

$
3,725

 
 
 
 
 
Liabilities:
 
 
 
 
Derivative liabilities
Level 3
$
13,864

$
672

$
14,536

     Total liabilities
 
$
13,864

$
672

$
14,536


The following table represents certain assets held for sale as of September 30, 2018, which have been measured at fair value on a non-recurring basis:
(in thousands)
Fair Value Hierarchy
Carrying Value
Adjustment to Fair Value
Fair Value
Trailers
Level 3
$
606

$
150

$
456



The Company recognized an unrealized loss relating to the change in fair value of the Company’s derivative asset and derivative liabilities of $956,000 during the three months ended December 31, 2018. No changes were recorded in earnings attributable to unrealized gains or losses relating to the Company’s assets or liabilities for the three months ended September 30, 2018.