7. OTHER ASSETS AND OTHER LIABILITIES

Other assets consisted of the following:

	December 31,
	2012		2011
Prepaid bonuses	$	31,847	$	36,797
Deferred tax assets	41,567		47,617
Investments accounted for under the cost method and equity method	31,414		35,960
Forgivable employee loans and advances to employees	31,655		23,909
Software inventory, net	4,615		6,909
Financial instruments owned	25,250		6,864
Deferred financing fees (1)	8,074		10,290
Other (1)	28,774		30,323
Total Other assets	$	203,196	$	198,669

(1) Balances as of December 31, 2011 have been reclassified for comparative presentation.

During the third quarter of 2011, the Company determined that its equity method investment in a third party brokerage firm with a proprietary trading platform was other-than-temporarily impaired and, in accordance with ASC 323-10, the investment was written down to its estimated fair value. The impairment recognized in the third quarter of 2011 was $2,255. During the fourth quarter of 2011, the Company exchanged its membership interests in this investment for a convertible senior secured promissory note (the “Note”) due in 2016 with a face value of $14,059. Upon the exchange of its membership interests, the Company recognized a loss of $4,094 for the difference between the book value of the membership interests and the fair value of the Note.

During the second quarter of 2012, the Company modified the Note by reducing its face value from $14,059 to $5,000 and increasing the percentage of membership interests into which the Note is convertible to 55%. The Company accounted for the Note as an available-for-sale security. Due to these modifications, the Company recorded a $2,700 impairment charge in the first quarter of 2012 in accordance with ASC 310-40 Troubled Debt Restructurings by Creditors. During the third quarter of 2012, the third party brokerage firm notified the Company that they had immediate liquidity concerns and that there was the prospect of insolvency in the near future. In accordance with ASC 320-10 Investments—Debt and Equity Securities, the Company determined that the Note had further been impaired and, therefore, the Note was written down to its estimated fair value, which was concluded to be zero. The impairment recognized in the third quarter of 2012 was $2,662.

The Company recorded the following impairment charges related to its investment in this third party brokerage firm:

	Year Ended December 31,
	2012		2011
Impairment charges (Included within Other expenses).	$	5,362	$	6,349

Other liabilities consisted of the following:

	December 31,
	2012		2011
Deferred revenues	$	7,247	$	16,879
Payroll related liabilities	15,418		16,364
Future purchase commitment and contingent consideration liabilities	3,727		13,681
Deferred tax liabilities	7,943		14,962
Unrecognized tax benefits	8,957		11,187
Financial instruments sold, not yet purchased	1,481		976
Other	38,801		23,514
Total Other liabilities	$	83,574	$	97,563