Company: MRCY
Filing Date: 2025-08-11
Form Type: 10-K
Source: 0001049521-25-000024
Chunk: 110

Company: MERCURY SYSTEMS INC
Filing Date: 2025-08-11
Form: 10-K
Item: Item 8
Chunk 110
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 beginning after December 15, 2026, and all interim periods within applicable annual periods, with early adoption permitted. The Company does not believe this standard will have an impact on its consolidated financial statements and related disclosures.

57

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Effective March 29, 2025, the company adopted ASU No. 2023-07, Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures, an amendment of the FASB Accounting Standards Codification. The amendments in this ASU address improvements to reportable segment disclosure requirements, specifically requiring disclosure of significant segment expenses. The amendment also extends certain annual disclosures to interim periods, and clarifies that single reportable segment entities must apply ASC 280 in its entirety, inclusive of this update. This adoption resulted in the Company disclosing it continues to be one reportable segment where the CEO is the Chief Operating Decision Maker ("CODM"), the selected profitability measure is consolidated net income (loss), and a reference that significant segment expenses are provided on the Consolidated Statement of Operations and Comprehensive Loss. The Company's segment assets are reported on the Consolidated Balance Sheets as Total Assets and its segment purchase of property plant and equipment are disclosed in the Notes to Consolidated Financial Statements. 

C.Fair Value of Financial Instruments  

The following table summarizes the Company's financial instruments measured at fair value on a recurring basis as of June 27, 2025: Fair Value Measurements June 27, 2025Level 1Level 2Level 3Liabilities:Interest rate swap$5,391 $— $5,391 $— Total measured at fair value$5,391 $— $5,391 $— The carrying values of cash and cash equivalents, including money market funds, restricted cash, accounts receivable and payable, contract assets and liabilities and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The Company determined the carrying value of long-term debt approximated fair value due to variable interest rates charged on the borrowings, which reprice frequently. During the first quarter ended September 29, 2023, the Company entered into an interest rate hedging agreement (the “September 2023 Swap”). The fair value of the September 2023 Swap is estimated using a discounted cash flow analysis based on the contractual terms of the derivative, leveraging observable inputs other than quoted prices, such as interest