Note 16 - Financial Instruments

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Financial Instruments Disclosure [Text Block]

16. Financial instruments

Concentration of credit risk

The Company is subject to credit risk with respect to its cash and cash equivalents, accounts receivable and other receivables. Concentrations of credit risk with respect to cash and cash equivalents are limited by the use of multiple large and reputable banks. Concentrations of credit risk with respect to the receivables are limited due to the large number of entities comprising the Company’s customer base and their dispersion across many different service lines.

Interest rate risk

The Company maintains an interest rate risk management strategy that uses interest rate hedging contracts from time to time. The Company’s specific goals are to: (i) manage interest rate sensitivity by modifying the characteristics of its debt and (ii) lower the long-term cost of its borrowed funds.

Foreign currency risk

Foreign currency risk is related to the portion of the Company’s business transactions denominated in currencies other than U.S. dollars. A portion of revenue is generated by the Company’s Canadian operations. The Company’s head office expenses are incurred in Canadian dollars which is hedged by Canadian dollar denominated revenue.

Fair values of financial instruments

The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of

December 31, 2018:

	Carrying value at		Fair value measurements
	December 31, 2018		Level 1		Level 2		Level 3
Contingent consideration liability	$	13,286	$	-	$	-	$	13,286

The inputs to the measurement of the fair value of contingent consideration related to acquisitions are Level

3

inputs. The fair value measurements were made using a discounted cash flow model; significant model inputs were expected future operating cash flows (determined with reference to each specific acquired business) and discount rates (which range from

8%

to

10%

). The range of discount rates is attributable to level of risk related to economic growth factors combined with the length of the contingent payment periods; and the dispersion was driven by unique characteristics of the businesses acquired and the respective terms for these contingent payments. Within the range of discount rates, there is a data point concentration at

9%.

A

2%

increase in the weighted average discount rate would reduce the fair value of contingent consideration by

$18.

Balance, December 31, 2017	$	18,418
Amounts recognized on acquisitions		4,536
Fair value adjustments		(167	)
Resolved and settled in cash		(9,245	)
Other		(256	)
Balance, December 31, 2018	$	13,286
Less: current portion	$	12,005
Non-current portion	$	1,281

The carrying amounts for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair values due to the short maturity of these instruments, unless otherwise indicated. The inputs to the measurement of the fair value of long term debt are Level

3

inputs. The fair value measurements were made using a net present value approach; significant model inputs were expected future cash outflows and discount rates (which range from

2.0%

to

2.5%

). The following are estimates of the fair values for other financial instruments:

	2018				2017
	Carrying amount		Fair value		Carrying amount		Fair value
Other receivables	$	4,212	$	4,212	$	3,515	$	3,515
Long-term debt		334,523		344,198		269,625		282,109

Other receivables include notes receivable from non-controlling shareholders and other non-current receivables.