FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2018

30.

FAIR VALUE MEASUREMENTS

The Group applies ASC Topic 820,

Fair Value Measurements and Disclosures

(“ASC 820”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The Group apply fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Goodwill, intangible assets, and other long-lived assets are measured at fair value on a nonrecurring basis, only if impairment is indicated.

The following table summarizes the nonrecurring fair value measurements for each class of assets as of and for the year ended December 31, 2018.

As of December 31, 2018, we determined that certain equipment and long-lived assets related to the Group’s terminated centers were impaired. In accordance with ASC 360 Property, plant and equipment, long-lived assets held and used with a carrying amount of RMB7,885 (US$1,147) were written down to their fair value of RMB117 (US$17). The resulting impairment charge of RMB7,768 (US$1,130) was recorded in “impairment of long-lived assets” in the consolidated statements of comprehensive loss. The Group calculated the fair value of long-lived assets based on estimated future discounted cash flows based on a discount rate of 14% and expected remaining useful life of such assets, and classified the fair value as a Level 3 measurement due to the significance of unobservable inputs.

Fair Value Measurement at the End of the Reporting Period Using

Quoted Prices
in Active

Significance

As of

Markets for
Identical

Other
Observable

Significant
Unobservable

December 31,
2018

Assets
(Level 1)

Inputs

(Level 2)

Inputs

(Level 3)

Total
loss

RMB

US$

RMB

Description

Fair value measurements on a recurring basis:

Available-for-sale debt investments

50,000

7,272

50,000

Nonrecurring fair value measurements:

Long-lived assets held and used

117

(7,768

)

Fair Value Measurement at the End of the Reporting Period Using

Quoted Prices
in Active

Significance

As of

Markets for
Identical

Other
Observable

Significant
Unobservable

December 31,
2017

Assets
(Level 1)

Inputs
(Level 2)

Inputs
(Level 3)

Total
loss

RMB

US$

RMB

Description

Nonrecurring fair value measurements:

Long-lived assets held and used

632

(1,507

)

- 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 + Details