Barnes & Noble Education, Inc.BNED
Barnes & Noble Education, Inc. Fair Value Disclosure
Fair Value Measurements
In accordance with ASC 820, Fair Value Measurements and Disclosures, the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor.
Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
Level 1—Observable inputs that reflect quoted prices in active markets
Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions
Our financial instruments include cash and cash equivalents, receivables, accrued liabilities, accounts payable, and long-term debt. The fair values of cash and cash equivalents, receivables, accrued liabilities, and accounts payable approximate their carrying values because of the short-term nature of these instruments, which are all considered Level 1 within the fair value hierarchy. The fair value of our short-term and long-term debt approximates its carrying value and is classified as Level 2, as it is estimated using observable market inputs such as current interest rates and credit spreads for similar instruments. See Note 8. Derivative, for fair value information about our derivative instrument that is fair valued using Level 3 inputs.
Non-Financial Assets
Our non-financial assets include property and equipment, operating lease right-of-use assets, and intangible assets. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets.
During the 53 weeks ended and the 52 weeks ended May 3, 2025 and April 27, 2024, respectively, we evaluated certain of our store-level long-lived assets for impairment, and recognized an impairment losses (non-cash) of $1,713 and $7,166, respectively, on the Consolidated Statements of Operations. The fair value of the impaired long-lived assets was determined using an income approach (Level 3 input), using our best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations. For additional information, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies.
The following table shows the fair values of our non-financial assets that were required to be remeasured at fair value on a non-recurring basis for each respective period and the total impairments recorded as a result of the remeasurement process:
53 weeks ended May 3, 2025 | 52 weeks ended April 27, 2024 | ||||||||||||||||||||||||||||||||||
| Carrying Value Prior to Impairment | Fair Value | Impairment Loss (non-cash) | Carrying Value Prior to Impairment | Fair Value | Impairment Loss (non-cash) | ||||||||||||||||||||||||||||||
| Property and equipment, net | $ | 314 | $ | — | $ | 314 | $ | 460 | $ | 55 | $ | 405 | |||||||||||||||||||||||
| Operating lease right-of-use assets | 1,006 | 716 | 290 | 8,044 | 4,444 | 3,600 | |||||||||||||||||||||||||||||
| Intangible assets, net | 1,109 | — | 1,109 | 3,860 | 699 | 3,161 | |||||||||||||||||||||||||||||
| Other noncurrent assets | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Total | $ | 2,429 | $ | 716 | $ | 1,713 | $ | 12,364 | $ | 5,198 | $ | 7,166 | |||||||||||||||||||||||
Non-Financial Liabilities
We granted phantom share units as long-term incentive awards which are settled in cash based on the fair market value of a share of common stock of the Company at each vesting date. The fair value of the liability for the cash-settled phantom share unit awards is remeasured at the end of each reporting period through settlement using a Black-Scholes option-pricing model, which incorporates significant inputs including the risk-free interest rate, expected volatility, expected dividend yield, and expected term or vesting period. As of May 3, 2025, we recorded a liability, which is immaterial to the balance sheet (Level 2 input) and is reflected in accrued liabilities on the Consolidated Balance Sheet. As of May 3, 2025 and April 27, 2024, respectively, we recorded an immaterial liability (Level 2 input) which is reflected in accrued liabilities on the Consolidated Balance Sheet. As of May 3, 2025, all phantom share units have been settled or forfeited. For additional information, see Note 14. Long-Term Incentive Compensation Expense.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 23, 2025 | Showing above |
| 2024 | Jul 1, 2024 | |
| 2023 | Jul 31, 2023 | |
| 2022 | Jun 29, 2022 | |
| 2021 | Jun 30, 2021 | |
| 2020 | Jul 14, 2020 | |
| 2019 | Jun 25, 2019 | |
| 2018 | Jun 20, 2018 | |
| 2017 | Jul 12, 2017 | |
| 2016 | Jun 29, 2016 | |
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.