J&J SNACK FOODS CORP Fair Value Disclosure

NOTE C – INVESTMENT SECURITIES

 

We classify our investment securities as marketable securities held to maturity and available for sale. The FASB defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the FASB has established three levels of inputs that may be used to measure fair value:

 

Level 1

Observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

Level 2

Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and

 

Level 3

Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

Historically, our marketable securities held to maturity and available for sale consisted primarily of investments in mutual funds, preferred stock and corporate bonds. The fair values of mutual funds are based on quoted market prices in active markets and are classified within Level 1 of the fair value hierarchy. The fair values of preferred stock and corporate bonds are based on quoted prices for identical or similar instruments in markets that are not active. As a result, preferred stock and corporate bonds are classified within Level 2 of the fair value hierarchy.

 

As of September 28, 2024 and as of September 30, 2023, the Company held no held to maturity investment securities or marketable securities available for sale.

 

Proceeds from the sale and redemption of marketable securities were $9.7 million and $12.0 million in the years ended September 30, 2023 and September 24, 2022, respectively; with a loss of $0.7 million in 2023 and a gain of $0.3 million in 2022. We use the specific identification method to determine the cost of securities sold. Unrealized gains of $0.7 million and $0.3 million were recorded in 2023 and 2022, respectively.