EDUCATIONAL DEVELOPMENT CORP Fair Value Disclosure
18. FINANCIAL INSTRUMENTS
The following methods and assumptions are used in estimating the fair-value disclosures for financial instruments:
| - | The carrying amounts reported on the balance sheets for cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value due to the short-term maturity of these instruments. | |
| - | The estimated fair value of our assets held for sale for the Hilti complex was approximately $37,000,000 as of February 28, 2025 and $40,019,200 as of February 29, 2024, respectively. Management’s estimates are based on the recent listing price of the Hilti Complex less the estimated costs to sell plus an estimated value of the excess land of approximately 17 acres for $2,500,000 along with the estimated fair value of equipment held for sale of approximately $1,000,000. | |
| - | The estimated fair value of our term notes payable is estimated by management to approximate $26,507,100 and $28,152,800 as of February 28, 2025 and February 29, 2024, respectively. Management’s estimates are based on the obligations’ characteristics, including floating interest rate, maturity, and collateral. | |
| - | The fair value of the Company’s interest rate swap of $(15,400) is based on Level 2 inputs, including the present value of estimated future cash flows based on market expectations of the yield curve on variable interest rates. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | May 19, 2025 | Showing above |
| 2024 | May 21, 2024 | |
| 2023 | May 17, 2023 | |
| 2022 | May 5, 2022 | |
| 2021 | May 13, 2021 | |
| 2020 | May 26, 2020 | |
| 2019 | May 29, 2019 | |
| 2018 | May 29, 2018 | |
| 2017 | May 30, 2017 | |
| 2016 | May 26, 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.