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INVESTMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended
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Dec. 31, 2020
Fair Value Disclosures [Abstract] |
INVESTMENTS AND FAIR VALUE MEASUREMENTS | INVESTMENTS AND FAIR VALUE MEASUREMENTS At December 31, 2020 and 2019, $25,919 and $24,136, respectively, of funds held for clients were invested in available-for-sale securities consisting of government and commercial bonds, including mortgage backed securities. As of December 31, 2020 and 2019, we also had $63,999 and $48,500, respectively, of funds held for clients invested in money market funds and other cash equivalents. Cash equivalents as of December 31, 2020 and December 31, 2019 was not material. Investments classified as available-for-sale consisted of the following:
| Amortized Cost |  | Gross Unrealized Gains (1) |  | Gross Unrealized Losses (1) |  | Aggregate Estimated Fair Value
December 31, 2020: |  |  |  |  |  |  |
Funds Held for Clients (2) |  |  |  |  |  |  |
Certificates of deposit | $ | 7,370 |  |  | $ | 204 |  |  | $ | — |  |  | $ | 7,574 |
Corporate debt securities | 9,415 |  |  | 297 |  |  | (1) |  |  | 9,711 |
Municipal bonds | 7,531 |  |  | 103 |  |  | (1) |  |  | 7,633 |
US Government agency securities | 500 |  |  | 1 |  |  | — |  |  | 501 |
Asset-backed securities | 499 |  |  | 1 |  |  | — |  |  | 500 |
Total | $ | 25,315 |  |  | $ | 606 |  |  | $ | (2) |  |  | $ | 25,919 |
December 31, 2019: |  |  |  |  |  |  |
Funds Held for Clients (2) |  |  |  |  |  |  |
Certificates of deposit | $ | 8,828 |  |  | $ | 11 |  |  | $ | — |  |  | $ | 8,839 |
Corporate debt securities | 6,883 |  |  | 6 |  |  | (9) |  |  | 6,880 |
Municipal bonds | 6,383 |  |  | 6 |  |  | (7) |  |  | 6,382 |
US Government agency securities | 1,000 |  |  | — |  |  | — |  |  | 1,000 |
Asset-backed securities | 1,067 |  |  | — |  |  | (32) |  |  | 1,035 |
Total | $ | 24,161 |  |  | $ | 23 |  |  | $ | (48) |  |  | $ | 24,136 |
(1)Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. At December 31, 2020, there were 69 securities in an unrealized gain position and there were 2 securities in an unrealized loss position. These unrealized losses were less than $(1) individually and $(2) in the aggregate. These securities have not been in a continuous unrealized gain or loss position for more than 12 months. The Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The Company reviews its investments to identify and evaluate investments that have an indication of possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. (2)At December 31, 2020 and 2019, none of these securities were classified as cash and cash equivalents on the Company’s balance sheet. Expected maturities of available-for-sale securities as of December 31, 2020 are as follows:
One year or less | $ | 5,507 |
After one year through five years | 20,412 |
After five years through 10 years | — |
After 10 years | — |
| $ | 25,919 |
ASC 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy, which is based on the reliability of the inputs used in measuring fair values. These tiers include: Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table presents the fair value hierarchy for our financial assets measured at fair value on a recurring basis as of December 31, 2020 and December 31, 2019, respectively:
|  |  | Fair Value Measure at December 31, 2020
| Total Carrying Value at December 31, 2020 |  | Quoted Prices in Active Market (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  |
Money market funds | $ | 5,204 |  |  | $ | 5,204 |  |  | $ | — |  |  | $ | — |
Funds held for clients |  |  |  |  |  |  |
Money market funds | 63,999 |  |  | 63,999 |  |  | — |  |  | — |
Available-for-sale securities | 25,919 |  |  | — |  |  | 25,919 |  |  | — |
Total | $ | 95,122 |  |  | $ | 69,203 |  |  | $ | 25,919 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Contingent purchase consideration | $ | 3,880 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,880 |
Total | $ | 3,880 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,880 |
|  |  | Fair Value Measure at December 31, 2019
| Total Carrying Value at December 31, 2019 |  | Quoted Prices in Active Market (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Funds held for clients |  |  |  |  |  |  |
Money market funds | $ | 48,500 |  |  | $ | 48,500 |  |  | $ | — |  |  | $ | — |
Available-for-sale securities | 24,136 |  |  | — |  |  | 24,136 |  |  | — |
Total | $ | 72,636 |  |  | $ | 48,500 |  |  | $ | 24,136 |  |  | $ | — |
Other Financial Assets and Liabilities Financial assets and liabilities with carrying amounts approximating fair value include cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses and other current liabilities. The carrying amount of these financial assets and liabilities approximates fair value because of their short maturities. Our line of credit and notes payable, including current portion, as of December 31, 2020, had a carrying value of $24,913. This carrying value approximates fair value. The fair value is based on interest rates that are currently available to us for issuance of debt with similar terms and remaining maturities. Our Level 3 balance is comprised of a contingent purchase obligation. This obligation is calculated using a Monte Carlo model that has significant unobservable inputs. We will revalue this obligation each quarter until it is paid. In July 2020, we acquired certain assets of a payroll tax business. The initial Purchase price for the assets was $4,250, which we paid for in cash at closing. The seller will be paid additional consideration for the assets based on the trailing twelve-month revenue at each of April 30, 2021 and October 31, 2021. Subject to any disagreement as to the calculation of the contingent purchase consideration, payments for contingent purchase consideration, if any, will be made by May 30, 2021 and December 30, 2021. For the initial measurement, we utilized a Monte Carlo simulation to determine the fair value of the contingent purchase consideration. We utilized a discounted cash flow model to determine if an adjustment was required at December 31, 2020. There was a $1,135 adjustment to the fair value of the contingent consideration at December 31, 2020.
Balance at January 1, 2020 |  | $ | — |
Purchase |  | 2,745 |
Net realized / unrealized losses |  | 1,135 |
Balance at December 31, 2020 |  | $ | 3,880 |

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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