Company: GGG
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000042888-25-000011
Chunk: 72

Company: GRACO INC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 8
Chunk 72
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 with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.Fair Value Measurements. The three levels of inputs in the fair value measurement hierarchy are as follows:Level 1 – based on quoted prices in active markets for identical assetsLevel 2 – based on significant observable inputsLevel 3 – based on significant unobservable inputsAssets and liabilities measured at fair value on a recurring basis and fair value measurement level were as follows (in thousands):Level20242023AssetsCash surrender value of life insurance2$24,411 $22,255 Forward exchange contracts2116 — Total assets at fair value$24,527 $22,255 LiabilitiesContingent consideration3$14,647 $1,375 Deferred compensation28,196 6,445 Forward exchange contracts2— 422 Total liabilities at fair value$22,843 $8,242 Contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans are held in trust. Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by participants in certain deferred compensation plans. The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds. The Company’s policy and accounting for forward exchange contracts are described below in Derivative Instruments and Hedging Activities.Contingent consideration liability represents the estimated value (using a probability-weighted expected return approach) of future payments to be made to previous owners of certain acquired businesses based on future revenues.Disclosures related to other fair value measurements are included below in Impairment of Long-Lived Assets, in Note F 

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(Debt) and in Note J (Retirement Benefits).Cash Equivalents. All highly liquid investments with a maturity of three months or less at the date of purchase are considered to be cash equivalents.Accounts Receivable. Accounts receivable includes trade receivables of $348 million in 2024 and $343 million in 2023. Other receivables totaled $15 million in 2024 and $11 million in 2023.Allowance for Credit Losses. Receivables reflected in the financial statements represent the net amount expected to be collected. An allowance for