DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2013

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

(11) 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 2012 or 2013.

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, 2013 by level within the fair value hierarchy:

	2012						2013
	Fair Value Measurement Using						Fair Value Measurement Using
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Contingent Liabilities Balance at January 1	$	-	$	-	$	1,010,000	$	-	$	-	$	1,010,000
Additions						-						-
Deletions						-						(393,000	)
Revisions						-						(196,000	)
Contingent Liabilities Balance at December 31					$	1,010,000					$	421,000

In 2011, 2012 and 2013, the Company recognized, on its consolidated balance sheets, approximately $5,000, $0 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.

During the quarter ended September 30, 2013, the Company remeasured and reduced the value of contingent liabilities by $196,000 and recognized this amount as other income for the quarter. $401,000 of contingent liabilities became payable as of September 30, 2013 and was paid in October 2013.  As of December 31, 2013, approximately $421,000 of contingent liabilities were recorded on the consolidated balance sheets.