Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements and Disclosures

v3.20.1
Fair Value Measurements and Disclosures
 12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Disclosures
NOTE 14. FAIR VALUE MEASURMENTS AND DISCLOSURES
Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” FASB ASC Topic 820 “
Fair Value Measurements and Disclosures,”
(“ASC 820”) 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 ASC 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).
Under ASC 820, a fair value measurement of a nonfinancial asset considers a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Therefore, fair value is a market-based measurement and not an entity-specific measurement. It is determined based on assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date.
As of December 31, 2019, 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 amount of the Notes at December 31, 2019 was $219.8 million compared to the estimated fair value of $203.9 million, based on the prevailing interest rates and trading activity of our Notes.
We have certain assets that are measured at fair value on a
non-recurring
basis that are adjusted to fair value only when the carrying values exceed the fair values. The categorization of the framework used to price the assets is considered Level 3 due to the subjective nature of the unobservable inputs used when estimating the fair value.
 
The following table summarizes the fair value of our financial assets and liabilities that are measured at fair value:
 
    
December 31, 2019
  
     Carrying Value
on Balance Sheet		      Fair Value Measurement Category  
     Level 1      Level 2      Level 3  
    
(Dollars in thousands)
  
Assets
            
Estimated fair value of other indefinite-lived intangible assets
   
$
260
 
    $ —      $ —      $ 260  
Liabilities:
            
Estimated fair value of contingent
earn-out
consideration included in accrued expenses
   
 
19
 
      —        —        19  
Long-term debt less unamortized debt issuance costs
   
$
228,894
 
      —      $ 212,956        —