Fair Value of Financial Instruments |
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Fair Value of Financial Instruments |
9. 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 March 31, 2018 and December 30, 2017 that are measured and recorded in the financial statements at fair value on a recurring basis (in thousands):
The fair values of CRA's money market funds are based on quotes received from third-party banks. The contingent consideration liabilities in the tables above are for estimated future contingent consideration payments related to prior acquisitions. The fair value measurement 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 consideration liability are CRA's measures of the estimated payouts based on internally generated financial projections and discount rates. The fair value of the contingent consideration 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 following table summarizes the changes in the contingent consideration liability over the fiscal quarter ended March 31, 2018 and the fiscal year ended December 30, 2017 (in thousands):
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