Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2017

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial instruments include cash and cash equivalents, short-term investments, accounts receivable, customer deposits, accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their fair value due to the short-term nature of these instruments.

Assets and liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations:



	As of June 30, 2017
	Level 1		Level 2		Level 3
Assets:
Short-term investments (1)	$	21,970	$	—	$	—
Total	$	21,970	$	—	$	—
Liabilities:
Contingent consideration (2)	$	—	$	—	$	2,100
Total	$	—	$	—	$	2,100
	As of December 31, 2016
	Level 1		Level 2		Level 3
Assets:
Short-term investments (1)	$	42,942	$	—	$	—
Total	$	42,942	$	—	$	—
Liabilities:
Contingent consideration (2)	$	—	$	—	$	2,100
Total	$	—	$	—	$	2,100


(1)	Short-term investments in the accompanying consolidated balance sheets are six-month U.S. Treasury Bills. The fair values of these assets are based on Level 1 inputs in the fair value hierarchy.

(2)

Contingent consideration liability represents arrangements to pay the former owners of certain companies we acquired. The remaining undiscounted maximum payment under the arrangements is $6.1 million. We estimated the fair value of the contingent consideration using a Monte Carlo Simulation, which is based on significant inputs, primarily forecasted future results of the acquired businesses not observable in the market, and thus represents a Level 3 measure. During the six months ended June 30, 2017, we made no payments as part of these arrangements. During the six months ended June 30, 2016, we paid $0.1 million as part of these arrangements.