DECKERS OUTDOOR CORPDECK

DECKERS OUTDOOR CORP Fair Value Disclosure

10-KFiled May 23, 20253 min read
FAIR VALUE MEASUREMENTS
The accounting standard for fair value measurements provides a framework for measuring fair value, which is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy under this accounting standard requires an entity to maximize the use of observable inputs, where available.

The following summarizes the three levels of inputs required:

•Level 1: Quoted prices in active markets for identical assets and liabilities.
•Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities.

•Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring the Company to develop its own assumptions.

The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents, trade accounts receivable, net, trade accounts payable, accrued payroll, and other accrued expenses, approximates fair value due to their short-term nature. When the Company makes short-term borrowings, the carrying amounts, which are considered Level 2 liabilities, approximate fair value based upon current rates and terms available to the Company for similar debt. The Company does not currently have any Level 3 assets or liabilities.
Assets and liabilities that are measured on a recurring basis at fair value in the consolidated balance sheets are as follows:
As ofMeasured Using
March 31, 2025Level 1Level 2Level 3
Assets:
Cash equivalents:
Money-market funds$1,485,555 $1,485,555 $— $— 
Other current assets:
Designated Derivative Contracts asset
2,163 — 2,163 — 
Non-Designated Derivative Contracts asset75 — 75 — 
Other assets:
Non-qualified deferred compensation asset16,967 16,967 — — 
Total assets measured at fair value$1,504,760 $1,502,522 $2,238 $— 
As ofMeasured Using
March 31, 2025Level 1Level 2Level 3
Liabilities:
Other accrued expenses:
Non-qualified deferred compensation liability$(2,345)$(2,345)$— $— 
Designated Derivative Contracts liability
(64)— (64)— 
Other long-term liabilities:
Non-qualified deferred compensation liability(22,793)(22,793)— — 
Total liabilities measured at fair value$(25,202)$(25,138)$(64)$— 

As ofMeasured Using
March 31, 2024Level 1Level 2Level 3
Assets:
Cash equivalents:
Money-market funds$1,152,083 $1,152,083 $— $— 
Other assets:
Non-qualified deferred compensation asset13,553 13,553 — — 
Total assets measured at fair value$1,165,636 $1,165,636 $— $— 
Liabilities:
Other accrued expenses:
Non-qualified deferred compensation liability$(408)$(408)$— $— 
Other long-term liabilities:
Non-qualified deferred compensation liability(16,229)(16,229)— — 
Total liabilities measured at fair value$(16,637)$(16,637)$— $— 

The Company’s non-financial assets, such as other long-lived assets and definite-lived intangible assets, which include operating lease assets, machinery and equipment, leasehold improvements, definite-lived trademarks; as well as indefinite-lived intangible assets and goodwill, are not required to be carried at fair value on a recurring basis and are reported at carrying value. Instead, these assets are tested for impairment annually, or when an event occurs or changes in circumstances indicate the carrying value may not be recoverable. When determining fair value, Level 3 measurements are used for the estimates and assumptions, including undiscounted future cash flows expected to be generated by the asset groups based upon historical experience, expected market conditions, as well and management’s plans.
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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.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew Standards