FAIR VALUE ACCOUNTING

6 Months Ended

Jun. 30, 2018

FAIR VALUE ACCOUNTING

FAIR VALUE ACCOUNTING

NOTE 13   FAIR VALUE ACCOUNTING

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are described below:

Level 1Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Assets and liabilities measured at fair value on a recurring basis

The following tables identify the fair value of the Company’s financial assets and liabilities as reported in the Consolidated Balance Sheets at June 30, 2018 and December 31, 2017 by level within the fair value hierarchy.  As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	Fair Value as at June 30, 2018
	Total		Level 1		Level 2		Level 3
Assets:
Investments	$	2,312	$	2,312	$	—	$	—
Total	$	2,312	$	2,312	$	—	$	—

	Fair Value as at December 31 2017
	Total		Level 1		Level 2		Level 3
Assets:
Investments	$	7,971	$	6,404	$	1,567	$	—
Total	$	7,971	$	6,404	$	1,567	$	—

The Company's investments include marketable equity securities which are exchange traded, and which are valued using quoted market prices in active markets and are classified within Level 1 of the fair value hierarchy. The fair value of the investments is calculated as the quoted market price of the marketable equity security multiplied by the number of shares held by the Company.

Furthermore, as noted in Note 2, Investments,  the Company’s investments also include warrants to purchase common stock of certain extractive industry companies. Since these warrants are not traded on an active market, they are valued using the Black-Scholes option pricing model, and classified within Level 2 of the fair value hierarchy. The main inputs used in the valuation of the warrants are volatility, interest rate, dividend yield and exercise price of the instruments.

The fair value of other financial assets and liabilities were assumed to approximate their carrying values due to their short-term nature and historically negligible credit losses.