Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 7. Fair Value Measurements

Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories:

· Level 1 – quoted prices in active markets for identical securities as of the reporting date;

· Level 2 – other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; and

· Level 3 – significant inputs that are generally less observable than objective sources, including our own assumptions in determining fair value.

The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

We did not have any financial assets or liabilities recorded at fair value on a recurring basis at September 30, 2013. Following are the disclosures related to our financial liability that was recorded at fair value on a recurring basis at December 31, 2012 (in thousands):

Fair Value at December 31, 2012	Level 1		Level 2		Level 3		Total
Interest rate swap	$	-	$	219	$	-	$	219

The fair value of our interest rate swap was based on quarterly statements from the issuing bank. There were no changes to our valuation techniques during the Nine Months Ended September 30, 2013 or 2012.

We believe the carrying amounts of Cash and cash equivalents, Accounts receivable, Accounts payable, Accrued salaries, wages and payroll taxes, Refundable deposits and Other accrued expenses are a reasonable approximation of the fair value of those financial instruments because of the nature of the underlying transactions and the short-term maturities involved.

We had fixed rate debt outstanding as follows (in thousands):

	September 30, 2013		December 31, 2012
Fixed-rate debt on balance sheet	$	1,036	$	1,260
Fair value of fixed-rate debt	$	1,053	$	1,275

We calculate the estimated fair value of our fixed-rate debt using a discounted cash flow methodology. Using estimated current interest rates based on a similar risk profile and duration (Level 2), the fixed cash flows are discounted and summed to compute the fair value of the debt.