12. Fair Value Measurements. Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of September 30, 2019 and December 31, 2018, consisted of the following (in thousands):

(1)	The fair value of the interest rate contract is determined using Level 2 fair value inputs and is recorded as other assets or other long-term obligations in the consolidated balance sheets.

(2)

The fair value of the foreign currency contract assets (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as prepaid expenses and other current assets or other long-term assets in the consolidated balance sheets.

(3)

The fair value of the foreign currency contract liabilities (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as accrued expenses or other long-term obligations in the consolidated balance sheets.

Certain of our business combinations involve the potential for the payment of future contingent consideration, generally based on a percentage of future product sales or upon attaining specified future revenue or other milestones. See Note 5 for further information regarding these acquisitions. The contingent consideration liability is re-measured at the estimated fair value at the end of each reporting period with the change in fair value recognized within operating expenses in the accompanying consolidated statements of income for such period. We measure the initial liability and re-measure the

liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. Changes in the fair value of our contingent consideration liabilities during the three and nine-month periods ended September 30, 2019 and 2018, consisted of the following (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Beginning balance	$	93,204	$	10,912	$	82,236	$	10,956
Contingent consideration liability recorded as the result of acquisitions (see Note 5)		1,203		—		9,583		—
Fair value adjustments recorded to income		273		(828)		3,473		(741)
Contingent payments made		(15,072)		(53)		(15,684)		(184)
Ending balance	$	79,608	$	10,031	$	79,608	$	10,031

As of September 30, 2019, approximately $72.5 million in contingent consideration liability was included in other long-term obligations and approximately $7.1 million was included in accrued expenses in our consolidated balance sheet. As of December 31, 2018, approximately $58.5 million in contingent consideration liability was included in other long-term obligations and $23.8 million was included in accrued expenses in our consolidated balance sheet. Cash paid to settle the contingent consideration liability recognized at fair value as of the acquisition date (including measurement-period adjustments) has been reflected as a cash outflow from financing activities in the accompanying consolidated statements of cash flows.

During the year ended December 31, 2016, we sold a cost method investment for cash and for the right to receive additional payments based on various contingent milestones. We determined the fair value of the contingent payments using Level 3 inputs defined under authoritative guidance for fair value measurements, and we recorded a contingent receivable asset, which as of September 30, 2019 and December 31, 2018 had a value of approximately $506,000 and $607,000, respectively, recorded as a current asset in other receivables in our consolidated balance sheets. We record any changes in fair value to operating expenses as part of our cardiovascular segment in our consolidated statements of income. During the three and nine-month periods ended September 30, 2019, we recorded a loss on the contingent receivable of approximately $(119,000) and $(101,000), respectively. During the three and nine-month periods ended September 30, 2018, we recorded a loss of approximately $(167,000) and $(299,000), respectively and received payments of approximately $0 and $153,000, respectively related to the contingent receivable.

The recurring Level 3 measurement of our contingent consideration liability and contingent receivable included the following significant unobservable inputs at September 30, 2019 and December 31, 2018 (amounts in thousands):


	Fair value at
	September 30,		Valuation
Contingent consideration asset or liability	2019		technique	Unobservable inputs	Range
Revenue-based royalty payments contingent liability	$	8,916	Discounted cash flow	Discount rate	13% - 25%
				Projected year of payments	2019-2034

Revenue milestones contingent liability	$	67,807	Monte Carlo simulation	Discount rate	13% - 15%
				Projected year of payments	2019-2022

Regulatory approval contingent liability	$	2,885	Scenario-based method	Discount rate	3.9%
				Probability of milestone payment	65%
				Projected year of payment	2022

Contingent receivable asset	$	506	Discounted cash flow	Discount rate	0%
				Probability of milestone payment	100%
				Projected year of payments	2020


	Fair value at
	December 31,		Valuation
Contingent consideration asset or liability	2018		technique	Unobservable inputs	Range
Revenue-based royalty payments contingent liability	$	10,661	Discounted cash flow	Discount rate	9.9% - 25%
				Projected year of payments	2018-2037

Supply chain milestone contingent liability	$	13,593	Discounted cash flow	Discount rate	5.3%
				Probability of milestone payment	95%
				Projected year of payments	2019

Revenue milestones contingent liability	$	57,982	Discounted cash flow	Discount rate	3.3% - 13%
				Projected year of payments	2019-2023

Contingent receivable asset	$	607	Discounted cash flow	Discount rate	10%
				Probability of milestone payment	67%
				Projected year of payments	2019

The contingent consideration liability and contingent receivable are re-measured to fair value each reporting period using projected revenues, discount rates, probabilities of payment, and projected payment dates. Projected revenues are based on our most recent internal operational budgets and long-range strategic plans. An increase (decrease) in either the discount rate or the time to payment, in isolation, may result in a significantly lower (higher) fair value measurement. An increase (decrease) in the probability of any milestone payment may result in higher (lower) fair value measurements. Our determination of the fair value of the contingent consideration liability and contingent receivable could change in future periods based upon our ongoing evaluation of these significant unobservable inputs. We intend to record any such change in fair value to operating expenses in our consolidated statements of income.

We recognize or disclose the fair value of certain assets, such as non-financial assets, primarily property and equipment, intangible assets and goodwill in connection with impairment evaluations. All our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. During the three and nine-month periods ended September 30, 2019, we recorded impairment charges of approximately $2.7 million and $3.3 million, respectively, related to certain acquired intangible assets (see Note 13). In addition, during the three and nine-month periods ended September 30, 2019, we had losses of approximately $196,000 and $829,000, compared to losses of approximately $0 and $86,000, respectively, for the three and nine-month periods ended September 30, 2018, related to the measurement of other non-financial assets at fair value on a nonrecurring basis subsequent to their initial recognition.

We believe the carrying amount of cash and cash equivalents, receivables, and trade payables approximate fair value because of the immediate, short-term maturity of these financial instruments. Our long-term debt re-prices frequently due to variable rates and entails no significant changes in credit risk and, as a result, we believe the fair value of long-term debt approximates carrying value. The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 2 inputs, with the exception of cash and cash equivalents, which are Level 1 inputs.