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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2011

Fair Value of Financial Instruments [Abstract]

7.	Fair Value of Financial Instruments

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The levels of the fair value hierarchy established by ASC 820 are:

Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.

The Company considers the recorded value of certain of its financial assets and liabilities, which consist primarily of cash, accounts receivable and accounts payable, to approximate the fair value of the respective assets and liabilities at September 30, 2011 and December 31, 2010 based upon the short-term nature of the assets and liabilities. The Company values goodwill, intangible assets, and contingent consideration using significant inputs which are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting.

At September 30, 2011 and December 31, 2010 the Company had approximately $163,000 and $17.0 million, respectively, deposited in a money market account with Bank of America.

The following table presents assets and liabilities measured at fair value at September 30, 2011:

		Quoted Prices		Significant
		in Active		Other			Significant
		Markets for		Observable			Unobservable
		Identical Assets		Inputs			Inputs
(in thousands)		(Level 1)		(Level 2)			(Level 3)		Total



Money market fund		$	163	$	-		$	-	$	163
Certificates of deposit			4,852		-			-		4,852
Foreign exchange contracts			-		457			-		457

	Total assets	$	5,015	$	457		$	-	$	5,472

Foreign exchange contracts		$	-	$	(637	)	$	-	$	(637	)

	Total liabilities	$	-	$	(637	)	$	-	$	(637	)

The following table presents assets and liabilities measured at fair value at December 31, 2010:

		Quoted Prices		Significant
		in Active		Other			Significant
		Markets for		Observable			Unobservable
		Identical Assets		Inputs			Inputs
(in thousands)		(Level 1)		(Level 2)			(Level 3)		Total



Money market fund		$	17,017	$	-		$	-	$	17,017
Certificates of deposit			779		-			-		779
Foreign exchange contracts			-		325			-		325

	Total assets	$	17,796	$	325		$	-	$	18,121

Foreign exchange contracts		$	-	$	(244	)	$	-	$	(244	)

	Total liabilities	$	-	$	(244	)	$	-	$	(244	)

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, 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 Company 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 risk is 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.

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