| Fair Value Measurement |
NOTE 4 – FAIR VALUE MEASUREMENT FASB Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value and establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows:
|
|
Level 1 |
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the KSOP has the ability to access. |
Level 2 |
Inputs to the valuation methodology include: •Quoted prices for similar assets or liabilities in active markets; •Quoted prices for identical or similar assets or liabilities in inactive markets; •Inputs other than quoted prices that are observable for the asset or liability; •Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. |
|
|
Level 3 |
Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used by the Plan for assets measured at fair value. There have been no changes to the methodologies used as of December 31, 2025 and 2024. Mutual Funds Valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (“NAV”) and to transact at that price. The mutual funds held by the Plan are actively traded. McGrath RentCorp Unitized Stock Fund (“Fund”) The Fund consists of the Company’s common stock and short-term cash which provides liquidity for daily trading. The Company’s common stock is valued at the quoted market price from a national securities exchange and the short-term cash investments are held in a money market mutual fund and are valued at fair value based on the NAV per share. A market-based NAV per share is calculated on a periodic basis. Shares can be redeemed on a same day basis but only directly from the Fund. Collective Investment Trusts
The Plan has investments in Collective Investment Trusts (CITs) managed by numerous investment funds. The CITs are valued at the NAV as provided by the administrators of the fund. The NAV is used as the practical expedient to estimate fair value. The NAV is based on the value of the underlying assets of the fund, less liabilities, and then divided by the number of units outstanding. Brokerage Account A participant-directed brokerage account allows an investor to buy or sell investments such as cash, stocks, unit investment trusts and mutual funds. The fair value of the brokerage account is the aggregation of the fair value of the underlying assets, all of which are actively traded. The following tables set forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2025 and 2024: Assets at fair value as of December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement Unit |
|
|
|
Fair value |
|
|
Quoted prices in active markets for identical assets |
|
|
Significant other observable inputs |
|
|
Significant unobservable inputs |
|
|
|
12/31/2025 |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual funds |
|
$ |
5,124,246 |
|
|
$ |
5,124,246 |
|
|
$ |
— |
|
|
$ |
— |
|
McGrath RentCorp Unitized Stock Fund: |
|
|
|
|
|
|
|
|
|
|
|
|
McGrath RentCorp Common Stock |
|
|
24,299,502 |
|
|
|
24,299,502 |
|
|
— |
|
|
— |
|
Money Market Mutual Fund |
|
|
314,896 |
|
|
|
314,896 |
|
|
— |
|
|
— |
|
Brokerage accounts |
|
|
10,530,126 |
|
|
|
10,530,126 |
|
|
— |
|
|
— |
|
Total assets held in fair value hierarchy |
|
|
40,268,770 |
|
|
$ |
40,268,770 |
|
|
$ |
- |
|
|
$ |
— |
|
Collective investment trusts at NAV |
|
|
101,391,370 |
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
141,660,140 |
|
|
|
|
|
|
|
|
|
|
Assets at fair value as of December 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement Unit |
|
|
|
Fair value |
|
|
Quoted prices in active markets for identical assets |
|
|
Significant other observable inputs |
|
|
Significant unobservable inputs |
|
|
|
12/31/2024 |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual funds |
|
$ |
3,945,197 |
|
|
$ |
3,945,197 |
|
|
$ |
— |
|
|
$ |
— |
|
McGrath RentCorp Unitized Stock Fund: |
|
|
|
|
|
|
|
|
|
|
|
|
McGrath RentCorp Common Stock |
|
|
26,105,823 |
|
|
|
26,105,823 |
|
|
— |
|
|
— |
|
Money Market Mutual Fund |
* |
|
535,032 |
|
|
|
535,032 |
|
|
— |
|
|
— |
|
Brokerage accounts |
|
|
8,817,301 |
|
|
|
8,817,301 |
|
|
— |
|
|
— |
|
Total assets held in fair value hierarchy |
|
|
39,403,353 |
|
|
$ |
39,403,353 |
|
|
$ |
- |
|
|
$ |
— |
|
Collective investment trusts at NAV |
|
|
90,094,068 |
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
129,497,421 |
|
|
|
|
|
|
|
|
|
|
* Prior year amounts have been reclassified to reflect the Money Market Fund as a Level 1 investment rather than Level 2. The following table presents the Plan’s investments with a reported NAV as a practical expedient at December 31, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
2025 |
|
|
2024 |
|
Collective investment trust: |
|
|
|
|
|
|
T Rowe Price Target-date Retirement Funds |
|
|
|
|
|
|
Fair value |
|
$ |
46,375,326 |
|
|
$ |
43,564,550 |
|
Unfunded commitment |
|
— |
|
|
— |
|
Redemption frequency (if currently eligible) |
|
Daily |
|
|
Daily |
|
Redemption notice period |
|
Daily |
|
|
Daily |
|
Northern Trust |
|
|
|
|
|
|
Fair value |
|
$ |
22,306,164 |
|
|
$ |
18,257,353 |
|
Unfunded commitment |
|
— |
|
|
— |
|
Redemption frequency (if currently eligible) |
|
Daily |
|
|
Daily |
|
Redemption notice period |
|
Daily |
|
|
Daily |
|
MFS Series Trust Fund |
|
|
|
|
|
|
Fair value |
|
$ |
9,993,042 |
|
|
$ |
8,702,060 |
|
Unfunded commitment |
|
— |
|
|
— |
|
Redemption frequency (if currently eligible) |
|
Daily |
|
|
Daily |
|
Redemption notice period |
|
Daily |
|
|
Daily |
|
Harbor Capital Appreciation |
|
|
|
|
|
|
Fair value |
|
$ |
9,205,584 |
|
|
$ |
7,459,147 |
|
Unfunded commitment |
|
— |
|
|
— |
|
Redemption frequency (if currently eligible) |
|
Daily |
|
|
Daily |
|
Redemption notice period |
|
Daily |
|
|
Daily |
|
Fidelity Institutional Asset Management |
|
|
|
|
|
|
Fair value |
|
$ |
4,676,794 |
|
|
$ |
4,000,818 |
|
Unfunded commitment |
|
— |
|
|
— |
|
Redemption frequency (if currently eligible) |
|
Daily |
|
|
Daily |
|
Redemption notice period |
|
Daily |
|
|
Daily |
|
Galliard Stable Return Fund E |
|
|
|
|
|
|
Fair value |
|
$ |
3,302,226 |
|
|
$ |
3,204,410 |
|
Unfunded commitment |
|
— |
|
|
— |
|
Redemption frequency (if currently eligible) |
|
Daily |
|
|
Daily |
|
Redemption notice period |
|
Daily |
|
|
Daily |
|
Metlife |
|
|
|
|
|
|
Fair value |
|
$ |
3,034,648 |
|
|
$ |
3,090,373 |
|
Unfunded commitment |
|
— |
|
|
— |
|
Redemption frequency (if currently eligible) |
|
Daily |
|
|
Daily |
|
Redemption notice period |
|
60 Day |
|
|
60 Day |
|
Great Gray Trust Company, LLC |
|
|
|
|
|
|
Fair value |
|
$ |
2,497,586 |
|
|
$ |
1,815,357 |
|
Unfunded commitment |
|
— |
|
|
— |
|
Redemption frequency (if currently eligible) |
|
Daily |
|
|
Daily |
|
Redemption notice period |
|
Daily |
|
|
Daily |
|
|