| Fair Value Measurements |
Fair Value Measurements We determine fair value based on a three-level valuation hierarchy as described below. Fair value is defined as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. The three-level hierarchy of inputs used to determine fair value is as follows: •Level 1 – Quoted prices in active markets for identical assets and liabilities. •Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. •Level 3 – Unobservable inputs (i.e. projections, estimates, interpretations, etc.) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We measure certain financial assets at fair value on a recurring basis, including our marketable securities which are classified as available-for-sale securities, and certain cash equivalents, specifically money market securities, commercial paper, municipal bonds and certificates of deposits. The money market accounts are valued based on quoted market prices in active markets. The available-for-sale marketable securities are valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third party entities. From time to time, we measure certain assets at fair value on a non-recurring basis, including evaluation of long-lived assets for impairments using Company-specific assumptions which would fall within Level 3 of the fair-value hierarchy. Fair value calculations contain significant judgments and estimates, which may differ from actual results due to, among other things, economic conditions, changes to the business model or changes in operating performance. During the thirteen and twenty-six week periods ended July 30, 2022 and July 31, 2021, we did not make any transfers between Level 1 and Level 2 financial assets. Furthermore, as of July 30, 2022, January 29, 2022 and July 31, 2021, we did not have any Level 3 financial assets. We conduct reviews on a quarterly basis to verify pricing, assess liquidity and determine if significant inputs have changed that would impact the fair value hierarchy disclosure. Financial Assets In accordance with the provisions of ASC 820, Fair Value Measurement, we categorized our financial assets based on the priority of the inputs to the valuation technique for the instruments as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | July 30, 2022 | | January 29, 2022 | | July 31, 2021 | | Level 1 | | Level 2 | | Level 3 | | Level 1 | | Level 2 | | Level 3 | | Level 1 | | Level 2 | | Level 3 | Cash equivalents (1): | | | | | | | | | | | | | | | | | | | Money market securities | $ | 64,210 | | | $ | — | | | $ | — | | | $32,764 | | $ | — | | | $ | — | | | $63,097 | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | Commercial paper | $ | — | | | $14,980 | | $ | — | | | $ | — | | | $4,999 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Marketable securities: | | | | | | | | | | | | | | | | | | | Commercial paper | $ | — | | | $ | 24,892 | | | $ | — | | | $ | — | | | $ | 64,233 | | | $ | — | | | $ | — | | | $ | 59,978 | | | $ | — | | | | | | | | | | | | | | | | | | | |
(1) Excluding cash.
Impairment of Long-Lived Assets On at least a quarterly basis, we assess whether events or changes in circumstances have occurred that potentially indicate the carrying value of long-lived assets may not be recoverable. Based on Level 3 inputs of historical operating performance, including sales trends, gross margin rates, current cash flows from operations and the projected outlook for each our stores, we determined that certain stores would not be able to generate sufficient cash flows over the remaining term of the related leases to recover our investment in the respective stores. As a result, we recorded non-recurring, non-cash impairment charges of less than $0.1 million and $0.1 million in the twenty-six weeks ended July 30, 2022 and July 31, 2021, respectively, to write-down the carrying value of certain long-lived store assets to their estimated fair values. | | | | | | | | | | | | | | | | | | | | | | | | | Thirteen Weeks Ended | | Twenty-Six Weeks Ended | | July 30,
2022 | | July 31,
2021 | | July 30,
2022 | | July 31,
2021 | | ($ in thousands) | | | | | | | | | | Carrying value of assets with impairment | $ | — | | | $ | 176 | | | $ | 13 | | | $ | 176 | | | Fair value of assets impaired | $ | — | | | $ | 40 | | | $ | — | | | $ | 40 | | | Number of stores tested for impairment | 3 | | | 3 | | | 4 | | | 11 | | | Number of stores with impairment | — | | | 1 | | | 1 | | | 1 | |
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