Note 6 - Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

6. Fair Value Measurements

The Company records its financial assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date.

The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into

three

broad levels. These levels are: Level 

1

(inputs are quoted prices in active markets for identical assets or liabilities); Level 

2

(inputs are other than quoted prices that are observable, either directly or indirectly through corroboration with observable market data); and Level 

3

(inputs are unobservable, with little or

no

market data that exists, such as internal financial forecasts). The Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following table summarizes information regarding the Company’s financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):

	Total			Level 1		Level 2			Level 3
As of September 30, 2019
Financial assets:
Deferred compensation plan	$	5,072		$	4,270	$	802		$	-
Foreign currency forward contracts		1			-		1			-
Total financial assets	$	5,073		$	4,270	$	803		$	-
Financial liabilities:
Foreign currency forward contracts	$	(18	)	$	-	$	(18	)	$	-
As of December 31, 2018
Financial assets:
Deferred compensation plan	$	4,719		$	3,925	$	794		$	-
Foreign currency forward contracts		101			-		101			-
Total financial assets	$	4,820		$	3,925	$	895		$	-

The deferred compensation plan assets consist of cash and several publicly traded stock and bond mutual funds, valued using quoted market prices in active markets, classified as Level 

1

within the fair value hierarchy, as well as guaranteed investment contracts, valued at principal plus interest credited at contract rates, classified as Level 

2

within the fair value hierarchy.

The Company’s foreign currency forward contracts are derivatives valued using various pricing models or discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves and currency rates, and are classified as Level 

2

within the fair value hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or the Company. Foreign currency forward contracts are presented at their gross fair values. Foreign currency forward contract assets are included within Prepaid expenses and other and foreign currency forward contract liabilities are included within Accrued liabilities in the Condensed Consolidated Balance Sheets.

The net carrying amounts of cash and cash equivalents, trade and other receivables, accounts payable, accrued liabilities, and borrowings on the line of credit approximate fair value due to the short-term nature of these instruments.