Investments |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Method Investments and Cost Method Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments |
INVESTMENTS
The Company has two investments in privately-held entities, both of which are online precious metals retailers and customers of the Company. The Company has exclusive supplier agreements with each entity, for which theses customers have agreed to purchase all bullion products required for their businesses exclusively from A-Mark, subject to certain limitations. The Company also provides fulfillment services to both of these customers. The following table shows the carrying value of the Company's investments in the privately held companies, categorized by type of investment:
Equity Method Investment
Effective January 15, 2016, the Company purchased additional shares of its investee's common stock for $2.3 million, thereby increasing the Company’s aggregate ownership interest from 15.0% to 20.0%, and increasing the aggregate purchase price of the shares acquired to $6.7 million. Due to the Company's increased ownership interest and other relevant factors, the Company determined it was necessary to change the accounting of this investment from the cost method to the equity method. Under the equity method of accounting, the Company is required to record its proportional interest in the investee's reported net income or loss for each reporting period, and is required to present its prior period financial results to reflect the equity method of accounting from the date of its initial investment in the investee.
During the quarter ended March 31, 2016, the Company recorded its proportionate share of the investee’s net income, which totaled $107,000 and $613,000 for the three and nine months ended March 31, 2016, respectively. The Company's share of these earnings is shown as "other income" on the condensed consolidated statements of income. No proportionate share of the investee's earnings was recognized for the three and nine months ended March 31, 2015. As of March 31, 2016, the Company increased the value of this investment by approximately $0.6 million, representing the Company's proportionate share of the investee’s earnings. As of March 31, 2016 and June 30, 2015, the net carrying balance of this equity method investment totaled $7.3 million and $2.0 million, respectively, which has been included as a component of long-term investments in the condensed consolidated balance sheets.
Cost Method Investment
The Company's other investment has been recorded using the cost method. As of March 31, 2016 and June 30, 2015, the Company’s ownership percentage, based on the number of fully dilutive common shares outstanding, was 2.5%, and the aggregate carrying balance of this investment was $0.5 million. This cost method investment has been included as a component of long-term investments in the condensed consolidated balance sheets.
Impairment
The Company reviews its investments accounted for under the equity method and cost method for a decline in value that may be other than temporary. During the nine months ended March 31, 2016 and March 31, 2015, the Company did not record any write-downs related to its investments. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of these investments.
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