Fair Value Measurements

We estimate the fair value of financial instruments using available market information and generally accepted valuation methodologies. We assess the inputs used to measure fair value using a three-tier hierarchy. The hierarchy indicates the extent to which pricing inputs used in measuring fair value are observable in the market. Level 1 inputs include unadjusted quoted prices for identical assets or liabilities and are the most observable. Level 2 inputs include unadjusted quoted prices for similar assets and liabilities that are either directly or indirectly observable, or other observable inputs such as interest rates, foreign currency exchange rates, commodity rates, and yield curves. Level 3 inputs are not observable in the market and include our own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the tables below.

There were no significant transfers between Levels 1, 2, and 3 during the twelve months ended March 31, 2019.

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:

Fair value measurement used

Recorded

value

as of

Active

markets

for

identical

assets or

liabilities

Quoted

prices in

similar

instruments

and

observable

inputs

Active

markets for

unobservable

inputs

(In thousands)

March 31, 2019

(Level 1)

(Level 2)

(Level 3)

Assets:

Corporate-owned life insurance — non-current

895

—

895

Fair value measurement used

Recorded

value

as of

Active

markets

for

identical

assets or

liabilities

Quoted

prices in

similar

instruments

and

observable

inputs

Active

markets for

unobservable

inputs

(In thousands)

March 31, 2018

(Level 1)

(Level 2)

(Level 3)

Assets:

Corporate-owned life insurance — non-current

853

—

853

The recorded value of the corporate-owned life insurance policies is adjusted to the cash surrender value of the policies obtained from the third party life insurance providers, which are not observable in the market, and therefore, are classified within Level 3 of the fair value hierarchy. Changes in the cash surrender value of these policies are recorded within “Other expenses (income), net” in the Consolidated Statements of Operations.

The following table presents a summary of changes in the fair value of the corporate-owned life insurance Level 3 asset for the fiscal years ended March 31, 2019 and 2018:



	Level 3 assets and liabilities
(In thousands)	2019		2018
Corporate-owned life insurance:
Balance on April 1	$	853	$	809
Realized Gains	15		17
Unrealized (loss) gain relating to instruments held at reporting date	27		27
Balance on March 31	$	895	$	853

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

AGILYSYS INC Fair Value Disclosure

About Fair Value Disclosures

Other Available Disclosures