What amount of Del Taco's liability-hedging assets were classified as 'Significant Other Observable Inputs (Level 2)' as of September 30, 2024?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
f the month-end date closest to its fiscal year end, which is a practical expedient under FASB authoritative guidance. The fair values of the Qualified Plan's assets by asset category are as follows (in thousands):
| ( | Other i.e., NAV Assets) | i M | oted Prices n Active arkets for dentical | Significant Other Observable Inputs | Uno | gnificant bservable Inputs | |||
|---|---|---|---|---|---|---|---|---|---|
| Total | (3) | Level 1) | (Level 2) | Level 3) | |||||
| Fair Value at September 30, 2024: | |||||||||
| Cash and cash equivalents | (1) | $ 2,933 | $ | $ | $ 2,933 | $ | |||
| Equity: | |||||||||
| Global equity | (2) | 40,193 | 40,193 | _ | _ | ||||
| Fixed income: | |||||||||
| Liability-hedging assets | (4) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, as of September 30, 2024, $114,586 of Del Taco's liability-hedging assets were classified as 'Significant Other Observable Inputs (Level 2)'.
Fair value measurements are categorized into a three-level hierarchy based on the inputs used in valuation. Level 2 inputs, which are 'Significant Other Observable Inputs', include quoted prices for similar assets or liabilities in active markets, or other inputs that are observable either directly or indirectly. This classification suggests that the valuation of these particular liability-hedging assets is based on market data that is not directly from active markets for identical assets but is still observable.
For a prospective Del Taco franchisee, understanding how the company values its assets and liabilities can provide insight into its financial management practices. The use of Level 2 inputs for liability-hedging assets indicates a reliance on observable market data, which can be seen as a more transparent and reliable valuation method compared to Level 3 inputs, which involve unobservable data and subjective assumptions. This information is useful for assessing the overall financial health and stability of Del Taco.