Investments and Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Investments and Fair Value Measurements [Abstract]

4. Investments and Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, we consider the principal or most advantageous market, and we consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance.

Our financial instruments are measured and recorded at fair value. Our non-financial assets, including property and equipment and goodwill, are measured at fair value upon acquisition, reviewed at least annually for impairment, and are fully assessed if there is an indicator of impairment. An adjustment would be made to the fair value of non-financial assets if an impairment charge is recognized.

Fair value is determined for assets and liabilities using a three-tiered hierarchy, based upon significant levels of inputs as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The below tables summarize the composition of our investments at September 30, 2015 and December 31, 2014 (in thousands). For both periods, all investments have been recorded to short-term available-for-sale securities on the consolidated balance sheet.

September 30, 2015	Amortized Cost		Unrealized Losses			Aggregate Fair Value
Short term municipal securities funds¹	$	54,443	$	(285	)	$	54,158
Total	$	54,443	$	(285	)	$	54,158

December 31, 2014	Amortized Cost		Unrealized Losses			Aggregate Fair Value
Short term municipal securities funds¹	$	59,520	$	(18	)	$	59,502
Total	$	59,520	$	(18	)	$	59,502

¹	Do not have a set maturity date.

The following tables detail the fair value measurements of assets and liabilities within the three levels of the fair value hierarchy at September 30, 2015 and December 31, 2014 (in thousands):

September 30, 2015	Fair Market Value		Level 1		Level 2		Level 3
Financial assets:
Municipal securities¹		54,158		54,158		-		-
Total financial assets	$	54,158	$	54,158	$	-	$	-

December 31, 2014	Fair Market Value		Level 1		Level 2		Level 3
Financial assets:
Municipal securities¹		59,502		59,502		-		-
Foreign currency exchange contracts		14		-		14		-
Total financial assets	$	59,516	$	59,502	$	14	$	-
Financial liabilities:
Foreign currency exchange contracts		1,359		-		1,359		-
Total financial liabilities	$	1,359	$	-	$	1,359	$	-

¹	At September 30, 2015 and December 31, 2014, municipal securities consisted solely of holdings in short-term municipal security funds.

Municipal securities are classified as Level 1 assets because market prices are readily available for these investments. Level 2 financial assets and liabilities represent the fair value of our foreign currency exchange contracts that were valued using pricing models that take into account the contract terms, as well as multiple inputs where applicable, such as currency rates.

On July 13, 2015, we announced our plan to cease operations and close our student and audit travel business by the end of 2015. As a result, during the third quarter of 2015 we performed an impairment analysis that resulted in us lowering the carrying value of all remaining property and equipment to zero. During the third quarter of 2015, the Company recorded an asset impairment charge of $1.5 million, which was classified as an asset impairment cost on the consolidated statement of operations.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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