Annual report pursuant to Section 13 and 15(d)

FAIR VALUE ACCOUNTING

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FAIR VALUE ACCOUNTING
12 Months Ended
Dec. 31, 2013
Fair Value Disclosures [Abstract]  
FAIR VALUE ACCOUNTING

NOTE 7. FAIR VALUE ACCOUNTING

FASB ASC Topic 820 “Fair Value Measurements and Disclosures” established a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring fair value. This framework defines three levels of inputs to the fair value measurement process and requires that each fair value measurement be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety. The three broad levels of inputs defined by the FASB ASC Topic 820 hierarchy are as follows:

 

   

Level 1 Inputs—quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;

 

   

Level 2 Inputs—inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability; and

 

   

Level 3 Inputs—unobservable inputs for the asset or liability. These unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances (which might include the reporting entity’s own data).

 

As of December 31, 2013, the carrying value of cash and cash equivalents, trade accounts receivables, accounts payable, accrued expenses and accrued interest approximates fair value due to the short-term nature of such instruments. The carrying value of other long-term liabilities approximates fair value as the related interest rates approximate rates currently available to the company. The following table summarizes the fair value of our financial assets that are measured at fair value:

 

     December 31, 2013  
   Total Fair Value and
Carrying Value on
Balance Sheet
     Fair Value Measurement Category  
      Level 1      Level 2      Level 3  
     (Dollars in thousands)  

Assets:

           

Cash and cash equivalents

   $ 65       $ 65       $ —         $ —     

Trade accounts receivable, net

     37,627         37,627         —           —     

Fair value of interest rate swap

     3,177         —           3,177         —     

Fair value of earn-out contingent payment

     616         —           —           616   

Liabilities

           

Accounts payable

     3,960         3,960         —           —     

Accrued expenses

     7,888         7,888         —           —     

Accrued interest

     37         37         —           —     

Long-term debt

     287,672         287,672         —           —