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Note 6 - Fair Value of Assets and Liabilities
 12 Months Ended
Dec. 31, 2015
Fair Value Disclosures [Abstract]  
Note 6 - Fair Value of Assets and Liabilities

Note 6 - Fair Value of Assets and Liabilities

 

Our financial instruments include cash and cash equivalents, trade receivables, accounts payable and accrued liabilities. For these short-term instruments, we have concluded that the historical carrying value is a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization.

 

During 2015 and 2014, there were no transfers of financial assets between Levels 1, 2 or 3 of fair value measurements. There have been no changes in the methodologies used at December 31, 2015 and December 31, 2014.

 

The table below shows assets measured at fair value on a non-recurring basis. The fair value of goodwill, trademarks and other intangible assets are determined using Level 3 inputs.

 

Assets Measured at Fair Value on a Non-recurring Basis
   Balance, December 31, 2015  Level 1  Level 2  Level 3  Total Gain / (Loss)
Goodwill – Battery & Energy Products Segment  $4,790   $—     $—     $4,790   $—   
Goodwill – Communications Systems Segment   11,493    —      —      11,493    —   
Trademark – Battery & Energy Products Segment   711    —      —      711    —   
Trademarks – Communications Systems Segment   2,700    —      —      2,700    (150)
      Total  $19,694   $—     $—     $19,694   $(150)

 

 

The quantitative impairment test for goodwill consists of a comparison of the fair value of the reporting unit with the carrying amount of the reporting unit to which it is assigned.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired.  If the carrying amount of a reporting unit exceeds its fair value, a second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. At December 31, 2015, we estimate that the fair value of goodwill exceeds the recorded value by more than 50%.

 

The impairment test for intangible assets with indefinite lives consists of a comparison of the fair value of the intangible assets with their carrying amounts. If the carrying value of the intangible assets exceeds the fair value, an impairment loss is recognized in an amount equal to that excess.  We determine the fair value of the reporting unit for goodwill impairment testing based on a discounted cash flow model.  We determine the fair value of our intangibles assets with indefinite lives (trademarks) through the royalty relief income valuation approach.

 

For our impairment tests of both goodwill and trademarks, we use key assumptions that include estimates of future customer orders and revenues. The use of such estimates involves inherent uncertainties, and future impairments may be warranted if such future orders and revenues do not materialize.