NOTE 11 — Fair Value Measurements
We measure our financial assets and liabilities at fair value on a recurring basis using a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies. The three levels of inputs used to measure fair value are as follows:
Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.
Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.
Recurring Fair Value Measurements
Financial assets and liabilities measured at fair value on a recurring basis and presented in our consolidated balance sheets are as follows:
 
December 31, 2017
 
Total
 
Level 2
 
Level 3
Foreign currency forward contracts
$
0.1

 
$
0.1

 
$

Total financial assets
$
0.1

 
$
0.1

 
$

 
 
 
 
 
 
Contingent consideration liabilities
$
0.3

 
$

 
$
0.3

Total financial liabilities
$
0.3

 
$

 
$
0.3

 
December 31, 2016
 
Total
 
Level 2
 
Level 3
Foreign currency forward contracts
$
0.1

 
$
0.1

 
$

Contingent consideration liabilities
1.9

 

 
1.9

Total financial liabilities
$
2.0

 
$
0.1

 
$
1.9


Refer to Note 8 for further information regarding foreign currency forward contracts and Note 10 for further information regarding contingent consideration liabilities.
Non-Recurring Fair Value Measurements
During 2016, we recorded asset impairment charges of $1.2. Refer to Note 3, Asset Impairments, for further information regarding these charges and the associated significant unobservable inputs.

Historical Timeline

Fiscal YearFiled
2017Feb 22, 2018Showing above
2016Feb 23, 2017
2015Feb 26, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.