Note 12 - Fair Value Measurement

12 Months Ended

Dec. 31, 2018

12.	Fair Value Measurement

The Company adopted ASC

820,

Fair Value Measurements and Disclosures

(“ASC

820”

), which defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. The framework that is set forth in this standard is applicable to the fair value measurements where it is permitted or required under other accounting pronouncements.

ASC

820

defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date. ASC

820

establishes a

three

-tier value hierarchy that prioritizes inputs to valuation techniques used for fair value measurement.

●

Level

consists of observable market data in an active market for identical assets or liabilities.

	●	Level 2 consists of observable market data, other than that included in Level 1, that is either directly or indirectly observable.

	●	Level 3 consists of unobservable market data. The input may reflect the assumptions of the Company, not a market participant, if there is little available market data and the Company’s own assumptions are considered by management to be the best available information.

Fair Value Notes Payable

The fair value of the Company’s notes payable is determined using various methods, including quoted market prices for notes with similar terms of maturity, which is a Level

measurement, and discounted cash flows, which is a Level

measurement. The fair values listed below are for complying with ASC

820

and do

not

appear in the consolidated financial statements. The carrying amounts and estimated fair values of notes payable are as follows (in thousands):

New Credit Facility
	Carrying Value		Fair Value
Notes payable December 31, 2017	$	85,912	$	86,542

Notes payable December 31, 2018	$	74,562	$	74,702

- 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.

+ References + Details