Fair Value Measurements and Long-term Investments

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements and Long-term Investments

6. Fair Value Measurements and Long-term Investments

Fair value measurements are based upon observable and unobservable inputs.

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices for similar instruments in active markets with inputs that are observable, either directly or indirectly. Our Level 2 derivative financial instruments include foreign currency forward contracts valued based upon observable values of spot and forward foreign currency exchange rates.

Level 3: Unobservable inputs are significant to the fair value of the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Our Level 3 instrument reflects the fair value of contingent consideration related to a completed acquisition. The fair value is based on a discounted cash flow analysis reflecting the likelihood of achieving specified performance measures or events and captures the contractual nature of the contingencies, commercial risk or time value of money.

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of the respective balance sheet dates:

	Balance Sheet	March 31, 2022								December 31, 2021
(In thousands)	Classifications	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Foreign exchange    derivative assets	Prepaid expenses    and other    current assets	$	0	$	100	$	0	$	100	$	0	$	352	$	0	$	352
Total assets		$	0	$	100	$	0	$	100	$	0	$	352	$	0	$	352
Contingent consideration      - current	Accrued   expenses	$	0	$	0	$	0	$	0	$	0	$	0	$	19	$	19
Total liabilities		$	0	$	0	$	0	$	0	$	0	$	0	$	19	$	19

The changes in our Level 3 liability measured at fair value on a recurring basis at March 31, 2022 is summarized as follows:

(In thousands)	Contingent Consideration
Balance at December 31, 2021	$	19
Payments		(19	)
Balance at March 31, 2022	$	0

Long-term Investments

The following table summarizes our long-term equity investments which are included in Other assets in the accompanying consolidated balance sheets:

	Number of Investees		Original		Carrying Value at
(In thousands, except for number of investees)	at March 31, 2022		Cost		March 31, 2022		December 31, 2021
Equity method investments (1)		4	$	7,099	$	11,862	$	12,260
Cost with adjustments		7		47,114		48,791		49,293
Total long-term equity investments		11	$	54,213	$	60,653	$	61,553

(1) Allscripts share of the earnings of our equity method investees is reported based on a one quarter lag.

As of March 31, 2022, it is not practicable to estimate the fair value of our non-marketable cost and equity method investments, primarily because of their illiquidity and restricted marketability. The factors we considered in trying to determine fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations, the issuer’s subsequent or planned raises of capital and observable price changes in orderly transactions.

Impairment of Long-term Investments

Each quarter, management performs an assessment of each of our investments on an individual basis to determine if there have been any declines in fair value. Based on our assessment, we determined no impairment charges were necessary for the three months ended March 31, 2022.

Long-term Financial Liabilities

Our long-term financial liabilities include amounts outstanding under our Senior Secured Credit Facility (as described in Note 10, “Debt”), with carrying values that approximate fair value since the interest rates approximate current market rates. Refer to Note 10, “Debt,” for further information regarding our long-term financial liabilities.