8. FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2011

Fair Value Disclosures [Text Block]

8. FINANCIAL INSTRUMENTS

Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair values as follows:

· Level 1 - Observable inputs such as quoted prices in active markets.

· Level 2 - Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

· Level 3 - Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value are based on one or more of the following valuation techniques:

· Market approach (Level 1) - Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

· Cost approach (Level 2) - Amount that would be required to replace the service capacity of an asset (replacement cost).

· Income approach (Level 3) - Techniques to convert future amounts to a single present amount based on market expectations (including present-value techniques, option-pricing and excess earning models).

The fair values of cash, accounts receivable, other receivables and accounts payable approximated their carrying values because of the short-term nature of these instruments. Accounts receivable consists primarily of amounts due from our customers, net of allowances. Other receivables consist primarily of amounts due from employees (sales persons’ advances in excess of commissions earned and employee travel advances); other customer receivables, net of allowances; and expected insurance recoveries. The carrying amount of our revolving line of credit approximates fair value, as it is comparable to the available financing in the marketplace during the year.