9. Fair Value Measurements

The Company measures certain financial assets and liabilities, including an interest rate swap and foreign currency derivatives, at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates. The fair value of the interest rate swaps is determined by using quoted market forward rates (level 2 inputs) and reflects the present value of the amount the Company would pay for contracts involving the same notional amount and maturity date. The fair value of the foreign exchange hedge is determined by using quoted market spot rates (level 2 inputs).

Accounting guidance on fair value establishes a hierarchy for those instruments measured at fair value which distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of three levels:

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

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Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable; and

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Level 3—Unobservable inputs developed using estimates and assumptions developed by the Company which reflect those that a market participant would use.

Determining which level to apply to an asset or liability requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The following table summarizes the financial instruments measured at fair value in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016 (in thousands):

	Fair Value Measurements
			Quoted Market Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Liabilities
Interest rate swap & foreign exchange hedges
- as of June 30, 2017	$	52	$	-	$	52	$	-
- as of December 31, 2016	$	205	$	-	$	205	$	-

The carrying amount of accounts receivable at June 30, 2017, approximates fair value because of the short-term nature of this item. As of June 30, 2017, no assets or liabilities were measured at fair value on a nonrecurring basis.