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Fair Value Measurement | 6 Months Ended
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Jun. 30, 2016
Fair Value Disclosures [Abstract] |
Fair Value Measurement | Fair Value Measurement The accounting guidance under Accounting Standards Codification “Fair Value Measurements and Disclosures” (“ASC 820-10”) requires the Company to make disclosures about the fair value of certain of its assets and liabilities. ASC 820-10 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. ASC 820-10 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. A brief description of those three levels is as follows:
• | Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.
• | Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
• | Level 3: Significant unobservable inputs.
Note F – Fair Value Measurement (continued) The Company’s financial assets and liabilities subject to fair value measurements as of June 30, 2016 and December 31, 2015 are as follows:
|  |  |  | June 30, 2016
|  |  |  | Fair Value Measurements
|  | Fair value |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 2,771 |  |  | $ | 2,771 |  |  | $ | — |  |  | $ | — |
Current marketable securities – available for sale |  | 32,546 |  |  | 32,546 |  |  | — |  |  | — |
Note receivable – related party |  | 2,817 |  |  | — |  |  | — |  |  | 2,817 |
Note receivable from seller of SM Canada |  | 1,239 |  |  | — |  |  | — |  |  | 1,239 |
Long-term marketable securities – available for sale |  | 90,144 |  |  | 90,144 |  |  | — |  |  | — |
Total assets |  | $ | 129,517 |  |  | $ | 125,461 |  |  | $ | — |  |  | $ | 4,056 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts |  | $ | 307 |  |  | $ | — |  |  | $ | 307 |  |  | $ | — |
Contingent consideration |  | 20,012 |  |  | — |  |  | — |  |  | 20,012 |
Total liabilities |  | $ | 20,319 |  |  | $ | — |  |  | $ | 307 |  |  | $ | 20,012 |
|  |  |  | December 31, 2015
|  |  |  | Fair Value Measurements
|  | Fair value |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 2,242 |  |  | $ | 2,242 |  |  | $ | — |  |  | $ | — |
Current marketable securities – available for sale |  | 32,424 |  |  | 32,424 |  |  | — |  |  | — |
Note receivable – related party |  | 2,990 |  |  | — |  |  | — |  |  | 2,990 |
Note receivable from seller of SM Canada |  | 1,158 |  |  | — |  |  | — |  |  | 1,158 |
Long-term marketable securities – available for sale |  | 88,465 |  |  | 88,465 |  |  | — |  |  | — |
Total assets |  | $ | 127,279 |  |  | $ | 123,131 |  |  | $ | — |  |  | $ | 4,148 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration |  | $ | 24,775 |  |  | $ | — |  |  | $ | — |  |  | $ | 24,775 |
Total liabilities |  | $ | 24,775 |  |  | $ | — |  |  | $ | — |  |  | $ | 24,775 |
Note F – Fair Value Measurement (continued) The majority of our level 3 balances consist of contingent consideration related to various acquisitions and certain notes receivable. The changes in our level 3 assets and liabilities for the periods ended June 30, 2016 and December 31, 2015 are as follows:
| Balance at January 1, |  | Payments |  | Accrued Interest |  | Acquisitions |  | Change in estimate |  | Foreign Currency Translation |  | Balance at June 30,
2016 |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Note receivable – related party | $ | 2,990 |  |  | (205 | ) |  | 32 |  |  |  |  |  |  |  |  | $ | 2,817 |
Note receivable – SM Canada | $ | 1,158 |  |  |  |  |  |  |  |  |  |  | 81 |  |  | $ | 1,239 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration | $ | 24,775 |  |  | (6,281 | ) |  |  |  |  |  | 1,518 |  |  |  |  | $ | 20,012 |
| Balance at January 1, |  | Payments |  | Accrued Interest |  | Acquisitions |  | Change in estimate |  | Foreign Currency Translation |  | Balance at December 31,
2015 |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Note receivable – related party | $ | 3,328 |  |  | (409 | ) |  | 71 |  |  |  |  |  |  |  |  | $ | 2,990 |
Note receivable – SM Canada | $ | 1,878 |  |  | (466 | ) |  |  |  |  |  |  |  | (254 | ) |  | $ | 1,158 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration | $ | 38,633 |  |  | (6,270 | ) |  |  |  |  |  | (5,576 | ) |  | (2,012 | ) |  | $ | 24,775 |
Forward contracts are entered into to manage the risk associated with the volatility of future cash flows (see Note O). Fair value of these instruments is based on observable market transactions of spot and forward rates. For the note receivable due from related party (see Note I) and due from the sellers of SM Canada (see Note D), the carrying value was determined to be the fair value, based upon their actual and imputed interest rates, which approximate current market interest rates. The Company has recorded a liability for potential contingent consideration in connection with the December 30, 2014 acquisition of all of the outstanding capital stock of Trendy Imports S.A. de C.V., Comercial Diecisiette S.A. de C.V. and Maximus Designer Shoes S.A. de C.V. (together, "SM Mexico"). Pursuant to the terms of an earn-out agreement between the Company and the seller of SM Mexico, earn-out payments, if achieved, are due annually to the seller of SM Mexico based on the financial performance of SM Mexico for each of the twelve-month periods ending on December 31, 2015 and 2016, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of SM Mexico during the earn-out period. The current portion of the earn-out due, based on the twelve-month period ending December 31, 2015, approximates the recorded value. An earn-out payment of $3,483 for the period ended December 31, 2015 was paid to the seller of SM Mexico in the first quarter of this year. The Company has recorded a liability for potential contingent consideration in connection with the August 13, 2014 acquisition of all of the outstanding capital stock of Dolce Vita Holdings, Inc. ("Dolce Vita"). Pursuant to the terms of an earn-out agreement between the Company and the seller of Dolce Vita, earn-out payments are due annually to the seller of Dolce Vita based on the financial performance of Dolce Vita for each of the twelve-month periods ending on September 30, 2015 and 2016, inclusive, provided that the aggregate minimum earn-out payment shall be no less than $5,000. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of Dolce Vita during the earn-out period. Note F – Fair Value Measurement (continued) The Company has recorded a liability for potential contingent consideration in connection with the February 21, 2012 acquisition of SM Canada. Pursuant to the terms of an earn-out agreement between the Company and the seller of SM Canada, earn-out payments, if achieved, are due annually to the seller of SM Canada based on the financial performance of SM Canada for each of the 12-month periods ending on March 31, 2013 through 2017, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of SM Canada during the earn-out period. An earn-out payment of $2,798 for the period ended March 31, 2016 was paid to the seller of SM Canada in the second quarter of this year. The Company has recorded a liability for potential contingent consideration in connection with the May 25, 2011 acquisition of all of the outstanding shares of capital stock of Cejon, Inc. and Cejon Accessories, Inc. and all of the outstanding membership interests in New East Designs, LLC (collectively, "Cejon"). Pursuant to the terms of an earn-out agreement between the Company and the sellers of Cejon, earn-out payments, if achieved, are made annually to the sellers of Cejon, based on the financial performance of Cejon for each of the twelve-month periods ending on June 30, 2012 through 2016, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of Cejon during the earn-out period. The carrying value of certain financial instruments such as accounts receivable, factor accounts receivable and accounts payable approximates their fair values due to the short-term nature of their underlying terms. The fair values of investment in marketable securities available for sale are determined by reference to publicly quoted prices in an active market. Fair value of the notes receivable held by the Company approximates their carrying value based upon their imputed or actual interest rate, which approximates applicable current market interest rates.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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