DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2012

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

(12)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC Topic 825, ''Disclosures About Fair Value of Financial Instruments,'' requires disclosure about the fair value of financial instruments. Carrying amounts for all financial instruments included in current assets and current liabilities approximate estimated fair values due to the short maturity of those instruments. The fair values of the Company's note payable are based on similar rates currently available to the Company.  The Company believes the fair value approximates book value for the notes receivable.

The Company follows ASC Topic 820, "Fair Value Measurements and Disclosures," which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements.  The statement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.  Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company.  Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1: Quoted prices are available in active markets for identical assets or liabilities.

Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; or

Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations.

ASC Topic 820 requires financial assets and liabilities to be classified based on the lowest level of input that is significant to the fair value measurement.  The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. There were no transfers between the fair value hierarchy levels during 2011 or 2012.

The following table represents the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2012 by level within the fair value hierarchy:

	Fair Value Measurement Using
	Level 1		Level 2		Level 3
Contingent Liabilities	$	-	$	-	$	1,010,000
	$	-	$	-	$	1,010,000
Balance as of December 31, 2010					$	1,840,000
Additions						-
Deletions						(830,000	)
Revisions						-
Balance as of December 31, 2011					$	1,010,000
Additions						-
Deletions						-
Revisions						-
Balance as of December 31, 2012					$	1,010,000

In 2010, 2011 and 2012, the Company recognized, on its consolidated balance sheets, approximately $17,000, $5,000 and $0 (net of taxes), respectively, of other comprehensive income to mark up the value of the cash flow hedge.  As required by ASC Topic 820, the Company calculated the value of the cash flow hedge using Level II inputs.

On November 2, 2011, the Company terminated for cause a dentist whose Office had been acquired on December 30, 2009.  As part of the acquisition, the Company recorded an estimated fair value of contingent liabilities of $280,000 assumed in the acquisition.  Pursuant to the purchase agreement, the Company paid $5,000 to terminate the agreement.  As a result, $280,000 of contingent liabilities were extinguished and recognized as other income during the quarter ended December 31, 2011.

During the quarter ended December 31, 2011, the Company remeasured and reduced the value of contingent liabilities by $550,000 and recognized this as other income.  As of December 31, 2012, approximately $1.0 million of contingent liabilities were recorded on the consolidated balance sheets, which are exercisable starting in September 2013.