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Fair Value Measurement | 9 Months Ended
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Sep. 30, 2016
Fair Value Measurement [Abstract] |
Fair Value Measurement | 5. Fair Value Measurement Assets and liabilities measured at fair value on a recurring basis consist of the following as of September 30, 2016 (in thousands):
|  |  |  |  | Fair Value Measurements at Reporting Date Using |
|  |  |  |  | Quoted Prices in |  | Significant |  |  |  |
|  |  |  |  | Active Markets |  | Other |  | Significant |
|  |  |  |  | for Identical |  | Observable |  | Unobservable |
|  | September 30, |  | Assets/Liabilities |  | Inputs |  | Inputs |
|  | 2016 |  | (Level 1) |  | (Level 2) |  | (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 10,108 |  | $ | 10,108 |  | $ | — |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred payments |  | $ | 12,340 |  | $ | — |  | $ | — |  | $ | 12,340 |
Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2015 (in thousands):
|  |  |  |  | Fair Value Measurements at Reporting Date Using |
|  |  |  |  | Quoted Prices in |  | Significant |  |  |  |
|  |  |  |  | Active Markets |  | Other |  | Significant |
|  |  |  |  | for Identical |  | Observable |  | Unobservable |
|  | December 31, |  | Assets/Liabilities |  | Inputs |  | Inputs |
|  | 2015 |  | (Level 1) |  | (Level 2) |  | (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 100 |  | $ | 100 |  | $ | — |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred payments |  | $ | 3,278 |  | $ | — |  | $ | — |  | $ | 3,278 |
The Company measures the above items on a recurring basis at fair value as follows:
| · |  | Money market funds – Classified in Level 1 is excess cash the Company holds in both taxable and tax-exempt money market funds and are included in cash and cash equivalents in the accompanying unaudited condensed consolidated balance sheets. The Company records any net unrealized gains and losses for changes in fair value as a component of Accumulated other comprehensive income in stockholders' equity. The Company's cash and cash equivalents held at December 31, 2015 and September 30, 2016, approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments.
| · |  | Deferred payments – The Company acquired certain assets and entered into deferred payment arrangements with the sellers in transactions in 2011 and January 2016, which are classified within Level 3 as there is no liquid market for similarly priced instruments. The deferred payments are valued using a discounted cash flow model that encompasses significant unobservable inputs to estimate the operating results of the acquired assets. The assumptions used to prepare the discounted cash flows include estimates for interest rates, enrollment growth, retention rates, obtaining regulatory approvals for expansion into new markets, and pricing strategies. These assumptions are subject to change as the underlying data sources evolve and the programs mature. The short-term portion of deferred payments was $1.1 million as of September 30, 2016 and is included in accounts payable and accrued expense.
The Company’s lease loss liability incorporates an assessment of current sublease market conditions and uses Level 3 inputs, but is not deemed a fair value liability as the future lease payments are required to be discounted using the Company’s incremental borrowing rate at the date of lease abandonment without subsequent adjustment. See Note 4 for further discussion of the Company’s lease loss liability. The Company did not change its valuation techniques associated with recurring fair value measurements from prior periods, and no assets or liabilities were transferred between levels of the fair value hierarchy during the nine months ended September 30, 2015 or 2016. Changes in the fair value of the Company’s Level 3 liabilities during the nine months ended September 30, 2016 are as follows (in thousands):
|  | Deferred |
|  | Payments |
Balance at December 31, 2015 |  | $ | 3,278 |
Amounts paid |  |  | (7,358) |
Contingent consideration in connection with NYCDA acquisition |  |  | 14,500 |
Other adjustments to fair value |  |  | 1,920 |
Balance at September 30, 2016 |  | $ | 12,340 |

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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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