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Note 18 - Financial Instruments | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Financial Instruments Disclosure [Text Block] |
18. | Financial instruments
Concentration of credit risk The Company is subject to credit risk with respect to its cash and cash equivalents, accounts receivable and other receivables. Concentrations of credit risk with respect to cash and cash equivalents are limited by the use of multiple large and reputable banks. Concentrations of credit risk with respect to the receivables are limited due to the large number of entities comprising the Company’s customer base and their dispersion across many different service lines. During the year ended December 31, 2023, there were $8,102 (2022 - $2,172) of write-offs from the allowance for credit losses. Interest rate risk The Company maintains an interest rate risk management strategy that uses interest rate hedging contracts from time to time. The Company’s specific goals are to: (i) manage interest rate sensitivity by modifying the characteristics of its debt and (ii) lower the long-term cost of its borrowed funds. Foreign currency risk Foreign currency risk is related to the portion of the Company’s business transactions denominated in currencies other than U.S. dollars. A portion of revenue is generated by the Company’s Canadian operations. The Company’s head office expenses are incurred in Canadian dollars which is economically hedged by Canadian dollar denominated revenue. Fair values of financial instruments The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2023:
|  | Carrying value at |  |  | Fair value measurements |
|  | December 31, 2023 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Contingent consideration liability |  | $ | 63,478 |  |  | $ | - |  |  | $ | - |  |  | $ | 63,478 |
Interest rate swap assets |  |  | 2,127 |  |  |  | - |  |  |  | 2,127 |  |  |  | - |
The Company has two interest rate swaps in place to exchange the floating interest rate on $182,500 of debt under its Credit Agreement for a fixed rate. The fair value of the interest rate swap asset was calculated through discounting future expected cash flows using the appropriate prevailing interest rate swap curve adjusted for credit risk. The inputs to the measurement of the fair value of contingent consideration related to acquisitions are Level 3 inputs using a discounted cash flow model; significant model inputs were expected future operating cash flows (determined with reference to each specific acquired business) and discount rates (which range from 8% to 10%). The range of discount rates is attributable to level of risk related to economic growth factors combined with the length of the contingent payment periods; and the dispersion was driven by unique characteristics of the businesses acquired and the respective terms for these contingent payments. Within the range of discount rates, there is a data point concentration at 9%. A 2% increase in the weighted average discount rate would not have a significant impact on the fair value of the contingent consideration balance.
|  | 2023 |  |  | 2022 |
Balance, January 1 |  | $ | 34,188 |  |  | $ | 32,346 |
Amounts recognized on acquisitions |  |  | 32,571 |  |  |  | 8,933 |
Fair value adjustments |  |  | 16,366 |  |  |  | (594 | )
Resolved and settled in cash |  |  | (20,136 | ) |  |  | (6,806 | )
Other |  |  | 489 |  |  |  | 309 |
Balance, December 31 |  | $ | 63,478 |  |  | $ | 34,188 |
Less: current portion |  | $ | 31,604 |  |  | $ | 25,537 |
Non-current portion |  | $ | 31,874 |  |  | $ | 8,651 |
The carrying amounts for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair values due to the short maturity of these instruments, unless otherwise indicated. The inputs to the measurement of the fair value of long term debt are Level 2 inputs. The fair value measurements were made using a net present value approach; significant model inputs were expected future cash outflows and discount rates (which range from 4.5% to 5.0%). The following are estimates of the fair values for other financial instruments:
|  | 2023 |  |  | 2022 |
|  | Carrying |  |  | Fair |  |  | Carrying |  |  | Fair |
|  | amount |  |  | value |  |  | amount |  |  | value |
Other receivables |  | $ | 4,238 |  |  | $ | 4,238 |  |  | $ | 4,881 |  |  | $ | 4,881 |
Long-term debt |  |  | 1,182,107 |  |  |  | 1,183,854 |  |  |  | 734,463 |  |  |  | 736,818 |
Other receivables include notes receivable from non-controlling shareholders and other non-current receivables.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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