Fair Value Measurement

6 Months Ended

Jun. 30, 2011

Fair Value Measurement

Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:


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

Level 2	—	Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3	—	Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

The following table presents information, as of June 30, 2011 and December 31, 2010, about the Company’s financial liabilities, the contingent purchase price related to acquisitions that are measured at fair value on a recurring basis, according to the valuation techniques the Company used to determine their fair values (in thousands):

June 30, 2011


							Fair
	Level 1		Level 2		Level 3		Value
Contingent purchase price related to acquisitions	$	—	$	—	$	3,946	$	3,946

Total liabilities at fair value	$	—	$	—	$	3,946	$	3,946

December 31, 2010


							Fair
	Level 1		Level 2		Level 3		Value
Contingent purchase price related to acquisitions	$	—	$	—	$	2,977	$	2,977

Total liabilities at fair value	$	—	$	—	$	2,977	$	2,977

In measuring the fair value of the contingent payment liability, the Company used an income approach that considers the expected future earnings of the acquired businesses and the resulting contingent payments, discounted at a risk-adjusted rate.

The table below sets forth a reconciliation of the Company’s beginning and ending Level 3 financial liability balance for the three months ended and six months ended June 30, 2011 (in thousands):


Balance as of March 31, 2011	$	1,304
Acquisition of Bruenger		2,581
Payment of contingent purchase obligation		—
Adjustment to contingent purchase obligation		61

Balance as of June 30, 2011	$	3,946


Balance as of December 31, 2010	$	2,977
Acquisition of Bruenger		2,581
Payment of contingent purchase obligation		(1,712	)
Adjustment to contingent purchase obligation		100

Balance as of June 30, 2011	$	3,946

- Definition

This element represents the disclosure related to the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods.

+ References+ Details