Company: PAYX
Filing Date: 2025-03-26
Form Type: 10-Q
Source: 0000950170-25-045216
Chunk: 41

Company: PAYCHEX INC
Filing Date: 2025-03-26
Form: 10-Q
Item: Part I, Item 8
Chunk 41
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        $
         
        —

        —

        —

        —

        Other
         
        $
         
        33.9

        $
         
        33.9

        $
         
        —

        $
         
        —

        Liabilities:

        Other long-term liabilities
         
        $
         
        33.9

        $
         
        33.9

        $
         
        —

        $
         
        —

16 

In determining the fair value of its assets and liabilities, the Company predominately uses the market approach. Money market securities, which are cash equivalents, are considered Level 1 investments as they are valued based on quoted market prices in active markets. Cash equivalents also include U.S. government agency and treasury securities with original maturities of 90 days or less which are considered Level 2 investments as they are valued based on similar, but not identical, instruments in active markets. AFS securities, including asset-backed securities, corporate bonds, municipal bonds, U.S. government agency securities, and VRDNs, when held by the Company, are included in Level 2 and are valued utilizing inputs obtained from an independent pricing service. To determine the fair value of the Company’s Level 2 AFS securities, the independent pricing service uses a variety of inputs, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly payment information. The Company has not adjusted the prices obtained from the independent pricing service because it believes that they are appropriately valued. Swaption Contracts are considered a Level 2 asset as they are remeasured on a recurring basis using observable market inputs, such as forward curves, volatility levels, discount, and interest rates with gains and losses reported through other comprehensive income on the Consolidated Statements of Income and Comprehensive Income. Assets included as other are mutual fund investments, consisting of participants’ eligible deferral contributions under the Company’s non-qualified and unfunded deferred compensation plans. The related liability is reported as other long-term liabilities. The mutual funds are considered Level 1 investments as they are valued based on quoted market prices in active markets. The Company’s long-term borrowings are accounted for on a historical cost basis. As of February 28, 2025 and May 31, 2024, the fair value of long-term borrowings, net of debt issuance costs was $398.2 million and