Fair Value Measurements

6 Months Ended

Jun. 30, 2017

Note 3. Fair Value Measurements

The following table provides information on those assets and liabilities measured at fair value on a recurring basis.

June 30, 2017


	Carrying amount				Fair Value Measurement Using
	in balance sheet		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash equivalents
Commercial paper	$	376	$	376	$	376	$	0	$	0
Treasury bills		7,418		7,418		7,418		0		0
Equity Securities		0		0		0		0		0

Liabilities:
Contingent earn-out		142		142		0		0		142

December 31, 2016

	Carrying amount				Fair Value Measurement Using
	in balance sheet		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash equivalents
Commercial paper	$	348	$	348	$	348	$	0	$	0
Treasury bills		7,427		7,427		7,427		0		0
Equity Securities		0		0		0		0		0

Liabilities:
Contingent earn-out		195		195		0		0		195

The fair value of the commercial paper and treasury bills is based on quoted market prices in an active market. The available-for-sale equity security is a limited-marketable company. There is an insignificant market for the equity securities held. The Company has determined the value for this equity security based on financial and other factors, which are considered level 3 inputs in the fair value hierarchy.

The contingent earn-out relates to the 2014 acquisition of the HazardPRO product line. Management estimated the probability of meeting the revenue targets over the measurement period to determine the fair value of the contingent earn-out, which is considered a level 3 input in the fair value hierarchy.

The change in level 3 liabilities at fair value on a recurring basis is summarized as follows:

	Three Months Ended June 30						Six Months Ended June 30
		2017			2016		2017			2016

Beginning Balance	$	195		$	455		$	195		$	455
Change in Fair Value		(53	)		(72	)		(53	)		(72	)
Ending Balance	$	142		$	383		$	142		$	383

The 2017 decrease in the contingent liability reflects the Company's expectation of lower future contingent payments due to the limited time remaining in the earn-out period. The 2016 decrease also reflected the Company's expectation of moderately lower future contingent payments over the time remaining in the earn-out period.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details