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Fair Value Measurements
12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurements
FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments
The Company’s financial instruments, none of which are held for trading purposes, include cash, restricted cash, accounts receivable, earnest money deposits, other assets, accounts payable, accrued expenses, customer and builder deposits, obligations related to land not owned under option contracts, borrowings on lines of credit, and notes payable. Per the fair value hierarchy, level 1 financial instruments include: cash, restricted cash, accounts receivable, earnest money deposits, other assets, accounts payable, accrued expenses, and customer and builder deposits due to their short-term nature. Level 2 financial instruments include: borrowings on lines of credit and notes payable. Obligations related to land not owned under option contracts are deemed to be level 3 financial instruments. The fair value for obligations related to land not owned under option contracts was based on the estimated future net cash flows discounted for inherent risk associated with the underlying inventory asset.

Due to the short-term nature, the carrying amounts of notes payable and borrowings on lines of credit approximate fair value. Furthermore, borrowings on lines of credit include floating interest rate terms. The fair value of obligations related to land not owned under option contracts is primarily determined by discounting the estimated future cash flow of each community using various unobservable inputs in our impairment analysis (see Note 2).

The Company estimates that, due to the short-term nature of the underlying financial instruments or the proximity of the underlying transaction to the applicable reporting date, the fair value of all financial instruments does not differ materially from the aggregate carrying values recorded in the consolidated financial statements as of December 31, 2017 and 2016.

Fair Value of Nonfinancial Instruments
Nonfinancial assets and liabilities include items such as inventory which is measured at cost unless the carrying value is determined to be not recoverable in which case the affected instrument is written down to fair value. The fair value of inventory is primarily determined by discounting the estimated future cash flow of each community using various unobservable inputs in our impairment analysis (see Note 2). Per the fair value hierarchy, these items are level 3 nonfinancial instruments. During the years ended December 31, 2017 and December 31, 2016, the Company recorded fair value adjustments of $0.1 million and $0, respectively, to those nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.