Fair Value of Financial Instruments

9 Months Ended

Oct. 03, 2015

Fair Value of Financial Instruments

Fair Value of Financial Instruments

6. Fair Value of Financial Instruments

        Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement), then priority to quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market (Level 2 measurement), then the lowest priority to unobservable inputs (Level 3 measurement).

        The following table shows CRA's financial instruments as of October 3, 2015 and January 3, 2015 that are measured and recorded in the financial statements at fair value on a recurring basis (in thousands):

	October 3, 2015
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Unobservable Inputs
	Level 1		Level 2		Level 3
Assets:
Money market funds	$	46	$	—	$	—
Total Assets	$	46	$	—	$	—
Liabilities:
Contingent acquisition liability	$	—	$	—	$	873
Total Liabilities	$	—	$	—	$	873

	January 3, 2015
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Unobservable Inputs
	Level 1		Level 2		Level 3
Assets:
Money market funds	$	20,042	$	—	$	—
Total Assets	$	20,042	$	—	$	—
Liabilities:
Contingent acquisition liability	$	—	$	—	$	316
Total Liabilities	$	—	$	—	$	316

        The fair values of CRA's money market funds are based on quotes received from third-party banks.

        The contingent acquisition liability in the table above is for estimated future contingent consideration payments related to a prior acquisition. The fair value measure of this liability is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurements of this contingent acquisition liability are CRA's measures of the estimated payouts based on internally generated financial projections and discount rates. The fair value of the contingent acquisition liability is reassessed on a quarterly basis by CRA using additional information as it becomes available and any change in the fair value estimate is recorded in the earnings of that period. The increase in the contingent acquisition liability from $0.3 million at January 3, 2015 to $0.9 million as of October 3, 2015 was due to the improved financial performance of the acquired entity during the fiscal year-to-date period ended October 3, 2015, which resulted in a charge of $0.8 million to costs of services during the fiscal year to date period ended October 3, 2015. Payments of approximately $0.3 million were made during the fiscal year-to-date period ended October 3, 2015.