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Fair Value Measurements
 12 Months Ended
Dec. 28, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.
ASC 820, Fair Value Measurement and Disclosures ("ASC 820"), establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:
•
Level 1—Quoted prices in active markets for identical assets or liabilities.
•
Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.
•
Level 3—Unobservable inputs based on the Company's assumptions.
ASC 820 requires the use of observable market data if such data is available without undue cost and effort.
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 28, 2019 (in thousands):
 
Fair Value at December 28, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Forward contracts
$
—

 
$
3,348

 
$
—

 
$
3,348

Deferred compensation plan assets:
 
 
 
 
 
 
 
Investment in publicly traded mutual funds
5,243

 
—

 
—

 
5,243

Total
$
5,243

 
$
3,348

 
$
—

 
$
8,591

Liabilities:
 
 
 
 
 
 
 
Contingent consideration
$
—

 
$
—

 
$
1,141

 
$
1,141

Forward contracts
—

 
1,824

 
—

 
1,824

Total
$
—

 
$
1,824

 
$
1,141

 
$
2,965


The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 29, 2018 (in thousands):
 
Fair Value at December 29, 2018
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Forward contracts
$
—

 
$
9,685

 
$
—

 
$
9,685

Deferred compensation plan assets:
 
 
 
 
 
 
 
Investment in publicly traded mutual funds
4,442

 
—

 
—

 
4,442

Total
$
4,442

 
$
9,685

 
$
—

 
$
14,127

Liabilities:
 
 
 
 
 
 
 
Contingent consideration
$
—

 
$
—

 
$
2,174

 
$
2,174

Forward contracts
—

 
730

 
—

 
730

Total
$
—

 
$
730

 
$
2,174

 
$
2,904


The fair values of the Company's deferred compensation plan assets are based on quoted prices. The deferred compensation plan assets are recorded in intangible and other assets—net in the Company's consolidated balance sheets. The fair values of the Company's forward contracts are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates.
As of December 28, 2019 and December 29, 2018, the fair value of the Company's debt approximated its carrying amount. The fair value of debt was obtained using observable market inputs.
Operating lease right-of-use assets with a carrying amount of $18.3 million and property, plant and equipment—net with a carrying amount of $1.8 million related to retail store leasehold improvements, fixturing and shop-in-shops were written down to a fair value of $8.7 million and $0.5 million, respectively, resulting in total impairment charges of $10.9 million for fiscal year 2019.
The fair values of operating lease right-of-use assets and fixed assets related to retail stores were determined using Level 3 inputs, including forecasted cash flows and discount rates. Of the $10.9 million impairment expense, $5.0 million, $3.4 million and $0.2 million were recorded in SG&A in the Americas, Europe and Asia segments, respectively and $1.9 million and $0.4 million were recorded in restructuring charges in the Americas and Europe segments, respectively.
In fiscal year 2018, property, plant and equipment—net with a carrying amount of $3.8 million related to retail store leasehold improvements and fixturing was written down to a fair value of $0.2 million and related key money in the amount of $0.2 million was deemed not recoverable, resulting in total impairment charges of $3.8 million for fiscal year 2018.
The fair value of trade names are measured on a non-recurring basis using Level 3 inputs, including forecasted cash flows, discounts rates and implied royalty rates. Trade name impairment charges are recorded in the Corporate cost area. See Note 1—Significant Accounting Policies for additional disclosures about trade name impairment.
In fiscal year 2019, the SKAGEN trade name with a carrying amount of $21.1 million was written down to its implied fair value of $4.5 million, resulting in a pre-tax impairment charge of $16.6 million.
In fiscal year 2018, the SKAGEN trade name with a carrying amount of $27.3 million was written down to its implied fair value of $21.1 million, resulting in a pre-tax impairment charge of $6.2 million.
The fair value of the contingent consideration liability related to Fossil Accessories South Africa Pty. Ltd. (‘‘Fossil South Africa’’) was determined using Level 3 inputs. See Note 15—Stockholders' Equity for additional disclosures about the equity transaction. The contingent consideration is based on Fossil South Africa's projected earnings and dividends through fiscal year 2020 with the final payments expected the following year. A discount rate of 14% was used to calculate the present value of the contingent consideration. The present value of the contingent consideration liability was valued at $1.1 million as of December 28, 2019.