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Fair Value Measurement
 3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurement Fair Value Measurement
The accounting guidance under Accounting Standards Codification 820-10, “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.
The Company’s financial assets and liabilities subject to fair value measurements as of March 31, 2021 and December 31, 2020 are as follows:

  March 31, 2021
  Fair Value Measurements
 Fair valueLevel 1Level 2Level 3
Assets:    
Forward contracts270 — 270 — 
Total assets$270 $— $270 $— 
Liabilities:    
Contingent consideration $677 $— $— $677 
Forward contracts439 — 439 — 
Total liabilities$1,116 $— $439 $677 

  December 31, 2020
  Fair Value Measurements
 Fair valueLevel 1Level 2Level 3
Liabilities:    
Contingent consideration $207 $— $— $207 
Forward contracts997 — 997 — 
Total liabilities$1,204 $— $997 $207 


Forward contracts are entered into to manage the risk associated with the volatility of future cash flows (see Note O - Derivative Instruments). Fair value of these instruments is based on observable market transactions of spot and forward rates.

The Company's level 3 balance consists of contingent consideration related to acquisitions. The changes in the Company's level 3 liabilities for the periods ended March 31, 2021 and December 31, 2020 are as follows:
Balance at January 1,PaymentsAcquisitionsAdjustments (1)Balance at
March 31,
2021
Liabilities:
     Contingent consideration *$207 — — 470 $677 
Balance at January 1,PaymentsAcquisitionsAdjustments (2)Balance at December 31,
2020
Liabilities:
     Contingent consideration$9,124 — — (8,917)$207 
(1) In 2021, amount of adjustments of $470 was included as an expense in operating expenses, related to the change in valuation of the contingent consideration in connection with acquisition of B.B. Dakota, Inc.

(2) In 2020, the amount consists of adjustments of $4,570 and $4,347 to the purchase accounting of B.B. Dakota, Inc. and GREATS Brand, Inc, respectively. The adjustment of $4,570 was included as a benefit to operating expenses and related to the change in valuation of the contingent consideration in connection with the acquisition of B.B. Dakota, Inc. The adjustment of $4,347 is comprised of an adjustment of $2,684 to the preliminary fair value, recorded during the first quarter 2020, and a benefit of $1,663 included in operating expenses related to the change in valuation of the contingent consideration in connection with the acquisition of GREATS Brand, Inc.

*Total contingent consideration liability of $677 is comprised of $113 of which is classified as current and $564 of which is classified as non-current on the consolidated balance sheets.
At March 31, 2021, the liability for potential contingent consideration was $7 in connection with the August 9, 2019 acquisition of GREATS Brand, Inc. Pursuant to the terms of an earn-out provision contained in the equity purchase agreement, between the Company and the sellers of GREATS Brand, Inc., earn-out payments are based on EBITA performance. The fair value of the contingent payments was estimated using the present value of the payments based on management’s projections of the financial results of GREATS Brand, Inc. during the earn-out period, utilizing a discount rate of 10.0%.

At March 31, 2021, the liability for potential contingent consideration was $670 in connection with the August 12, 2019 acquisition of B.B. Dakota, Inc. Pursuant to the terms of an earn-out provision contained in the equity purchase agreement, between the Company and the sellers of B.B. Dakota, Inc., earn-out payments are based on EBITDA performance. The fair value of the contingent payments was estimated using the present value of the payments based on management’s projections of the financial results of B.B. Dakota, Inc. during the earn-out period, utilizing a discount rate of 10.5%.

The fair value of trademarks is measured on a non-recurring basis using Level 3 inputs, including forecasted cash flows, discount rates and implied royalty rates.(See Note N)

The fair values of right-of-use lease assets and fixed assets related to Company-owned retail stores were determined using Level 3 inputs, including estimated discounted future cash flows associated with the assets using sales trends and market participant assumptions. (See Note I)

The carrying value of certain financial instruments such as cash equivalents, certificates of deposit, accounts receivable, factor accounts receivable and accounts payable approximates their fair values due to the short-term nature of their underlying terms. 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. Some assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. These assets can include long-lived assets that have been reduced to fair value when impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.