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FAIR VALUE MEASUREMENTS
 9 Months Ended
Oct. 03, 2020
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 October 3, 2020 (in thousands):
 Fair Value at October 3, 2020
 Level 1Level 2Level 3Total
Assets:    
Forward contracts$— $329 $— $329 
Deferred compensation plan assets:    
Investment in publicly traded mutual funds5,540 — — 5,540 
Total$5,540 $329 $— $5,869 
Liabilities:    
Contingent consideration$— $— $1,517 $1,517 
Forward contracts— 1,577 — 1,577 
Total$— $1,577 $1,517 $3,094 
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 28, 2019 (in thousands):
 Fair Value at December 28, 2019
 Level 1Level 2Level 3Total
Assets:    
Forward contracts$— $3,348 $— $3,348 
Deferred compensation plan assets:    
Investment in publicly traded mutual funds5,243 — — 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 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 condensed 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. See “Note 10—Derivatives and Risk Management” for additional disclosures about the forward contracts.
As of October 3, 2020, debt, excluding unamortized debt issuance costs and capital leases, was recorded at cost and had a carrying value of $257.0 million and had a fair value of approximately $245.0 million. The fair value of debt was based on observable market inputs.
The fair value of trade names are measured on a non-recurring basis using Level 3 inputs, including forecasted cash flows, discount rates and implied royalty rates. During the first quarter of fiscal year 2020, the MICHELE® trade name with a carrying amount of $10.9 million was written down to its implied fair value of $8.4 million, resulting in a pre-tax impairment charge of $2.5 million in the Year To Date Period. The trade name impairment charge was recorded in the Corporate cost area. No trade name impairment was recorded during the Third Quarter.
During the Year To Date Period, operating lease right-of-use ("ROU") assets with a carrying amount of $38.5 million and property, plant and equipment-net with a carrying amount of $5.8 million related to retail store leasehold improvements,
fixturing and shop-in-shops were written down to a fair value of $14.5 million and $1.6 million, respectively, resulting in impairment charges of $28.2 million.
The fair values of operating lease ROU assets and fixed assets related to retail stores were determined using Level 3 inputs, including forecasted cash flows and discount rates. Of the $28.2 million impairment expense, $16.9 million, $6.5 million, and $1.0 million was recorded in SG&A in the Americas, Europe and Asia segments, respectively, and $2.0 million, $1.1 million, and $0.7 million was recorded in restructuring charges in the Americas, Europe and Asia segments, respectively.
The fair value of the contingent consideration liability related to Fossil South Africa was determined using Level 3 inputs. The contingent consideration is based on Fossil South Africa's projected earnings and dividends. The present value of the contingent consideration liability was valued at $1.5 million as of October 3, 2020. The Company recorded $0.1 million of the variable consideration in accrued expenses-other and $1.4 million in other long-term liabilities in the condensed consolidated balance sheets at October 3, 2020.