Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v3.23.1
Fair Value Measurements (Tables)
6 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of Fair Value of Assets and Liabilities
Table 8.1: Fair Value Measurements
As of March 31, 2023
Level 1 Level 2 Level 3 Balance
(in thousands)
Assets:
Deferred compensation assets - Rabbi Trust $ 25,820  $ —  $ —  $ 25,820 
Interest rate swap - $300 million notional value
—  24,636  —  24,636 
Notes receivable —  —  7,055  7,055 
Total assets $ 25,820  $ 24,636  $ 7,055  $ 57,511 
Liabilities:
Interest rate swaps - $350 million notional value
$ —  $ 4,548  $ —  $ 4,548 
Contingent consideration —  —  13,654  13,654 
Total liabilities $ —  $ 4,548  $ 13,654  $ 18,202 
The fair values of receivables, prepaids, other assets, accounts payable, accrued costs, and other current liabilities approximate the carrying values as a result of the short-term nature of these instruments. The carrying value of our debt is consistent with the fair value as the stated interest rates in the agreements are consistent with the current market rates used in notes with similar terms in the markets (Level 2 inputs).
Accumulated Other Comprehensive Loss
All amounts recorded in accumulated other comprehensive loss are related to our foreign currency translations and interest rate swap, net of tax. The following table shows changes in accumulated other comprehensive loss:
Table 8.2: Details of Changes in Accumulated Other Comprehensive Loss by Category
Foreign currency translation adjustment Net unrealized gain on derivatives, net of tax Total
(in thousands)
Balance as of September 30, 2022 $ (57,109) $ 23,148  $ (33,961)
Other comprehensive income before reclassifications 8,885  (5,012) 3,873 
Amounts reclassified from accumulated other comprehensive loss 116  (3,331) (3,215)
Net current period other comprehensive losses 9,001  (8,343) 658 
Balance as of March 31, 2023 $ (48,108) $ 14,805  $ (33,303)
Contingent Consideration
The fair value of our contingent considerations are based upon estimates of the likely payments, which are based upon assumptions over future performance. The liabilities are reviewed on a quarterly basis and, where changes in estimates arise, these are recorded to selling and general administrative expenses.
Our contingent consideration relates to the businesses below:
In October 2021, we acquired the student loan servicing business from Navient, rebranded as Aidvantage. Future payments are based upon volumes, up to a maximum payment of $65.0 million. At March 31, 2023 and September 30, 2022, the Aidvantage contingent consideration was $11.2 million and $13.8 million, respectively.
In January 2022, we acquired BZ Bodies Limited. Future payments are based upon the performance of the business through December 2023, up to a maximum payment of $2.5 million (£2.0 million British Pounds). At March 31, 2023 and September 30, 2022, we recorded a contingent consideration liability for the maximum payment, which we anticipate making in fiscal year 2024.
In December 2015, we acquired companies doing business as Assessments Australia. Future payments were based upon future revenue earnings. The deadline for the payment expired on December 31, 2022, with no payment being required.
Movement in our contingent consideration balance is as follows:
Table 8.3: Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
Contingent Consideration
(in thousands)
Opening contingent consideration as of September 30, 2022 $ 16,236 
Adjustments to fair value recorded in the period 1,202 
Cash payments (4,041)
Foreign currency translations 257 
Closing contingent consideration as of March 31, 2023 $ 13,654