Note 15. Fair Value of Financial Assets

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Note 15. Fair Value of Financial Assets

The fair values of substantially all of our financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the fair values presented are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.

The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.

· Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.

· Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector.

· Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and we may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities.

The following methods and assumptions were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets:

Cash equivalents: Cash equivalents primarily consist of money market funds which are classified within Level 1 of the fair value hierarchy.

Equity securities: The Company’s investments in equity securities are classified within Level 1 of the fair value hierarchy. 

Bonds: The Company’s investments in bonds are classified within Level 1 or Level 2 of the fair value hierarchy depending on the instrument.

Non-qualified deferred compensation plan investments: The assets of the non-qualified plan are set up in a rabbi trust. They represent mutual funds and publicly traded securities, each of which are classified within Level 1 of the fair value hierarchy.

Derivative instruments: Options related to equity securities are marked to market each reporting period and are classified within Level 2 of the fair value hierarchy.

As of June 30, 2019 and December 31, 2018, the fair values of financial assets were as follows.

	June 30, 2019								December 31, 2018
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	10,118	$	—	$	—	$	10,118	$	21,448	$	—	$	—	$	21,448
Equity securities:
Consumer goods		—		6,421		—		6,421		1,708		4,100		—		5,808
Bonds		35,557		—		—		35,557		32,404		—		—		32,404
Options on equity securities		—		2,142		—		2,142		—		2,755		—		2,755
Non-qualified deferred
compensation plan
investments		2,057		—		—		2,057		2,149		—		—		2,149
Total assets at fair value	$	47,732	$	8,563	$	—	$	56,295	$	57,709	$	6,855	$	—	$	64,564

There were no changes in our valuation techniques used to measure fair values on a recurring basis.