7. Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

7. Fair Value Measurements

(7)           Fair Value Measurements

We have financial instruments as of March 31, 2013 and December 31, 2012 for which the fair value is summarized below (in thousands):

	March 31, 2013				December 31, 2012
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Assets:
Trade receivables, net	$	2,196	$	2,162	$	3,438	$	3,383
Certificate of deposit		500		500		500		500

Assets for which fair value is disclosed but not required to be recognized in the balance sheet on a recurring basis are summarized below as of March 31, 2013 and December 31, 2012 (in thousands):

			Fair value measurement at reporting date
Description	As of March 31, 2013		Level 1		Level 2		Level 3
Assets:
Trade receivables, net	$	2,162	$	-	$	-	$	2,162
Certificate of deposit		500		-		-		500
Financing receivables, net		175		-		-		175
Description	As of December 31, 2012		Level 1		Level 2		Level 3
Assets:
Trade receivables, net	$	3,383	$	-	$	-	$	3,383
Certificate of deposit		500		-		-		500
Financing receivables, net		124		-		-		124

The fair value measurement for the contingent consideration is based on significant inputs not observed in the market and thus represents a Level 3 measurement. Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value.

The carrying amount of certificate of deposits approximates fair value, as determined by certificates of deposits with similar terms and conditions.  The trade receivables consist primarily of extended payment term agreements and the fair value is computed using a discounted cash flow model using estimated market rates.

Our disclosure of the estimated fair value of our financial instruments is made in accordance with generally accepted accounting guidance. The estimated fair value amounts have been determined using available market information and valuation methodologies we consider to be appropriate. However, considerable judgment is required to interpret market data in order to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize in a current market exchange. The use of different market assumptions and estimation methodologies may have a material effect on the estimated fair value amounts. The fair value estimates presented herein are based on pertinent information available to management as of March 31, 2013 and December 31, 2012.