| Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2019 |
| Accounting Policies [Abstract] | |
| Principles of Consolidation and Basis of Presentation | ( a) Principles of Consolidation and
Basis of Presentation The consolidated financial
statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The consolidated
financial statements also include the accounts of (a) Great American Global Partners, LLC which is controlled by the Company as
a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence
over the funding of operations, and (b) GA Retail Investments, L.P. which is controlled by the Company as a result of its ownership
of a 50% partnership interest, appointment of executive officers and significant influence over the operations. All intercompany
accounts and transactions have been eliminated upon consolidation. The accounting guidance
requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it
a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the
primary beneficiary of a Variable Interest Entity (“VIE”); to eliminate the solely quantitative approach previously
required for determining the primary beneficiary of a VIE; to add an additional reconsideration event for determining whether an
entity is a VIE when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group,
lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly
impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements
with more transparent information about an enterprise’s involvement in a VIE. |
| Use of Estimates | (b) Use of Estimates The preparation of the consolidated financial statements in
accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial
statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain
items such as valuation of securities, allowance for doubtful accounts, the fair value of intangible assets and goodwill, the fair
value of mandatorily redeemable noncontrolling interests, fair value of share based arrangements, accounting for income tax valuation
allowances, recovery of contract assets and sales returns and allowances. Estimates are based on historical experience, where applicable,
and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with
estimates, actual results may differ. |
| Revenue Recognition | (c) Revenue
Recognition On January 1, 2018,
the Company adopted Accounting Standards Codification ("ASC") 606 – Revenue from Contracts with Customers Revenues are recognized
when control of the promised goods or performance obligations for services is transferred to the Company's customers, in
an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services. Revenues from contracts
with customers in the Capital Markets segment, Auction and Liquidation segment, Valuation and Appraisal segment, Principal Investments
– United Online and magicJack segment and Brands segment are primarily comprised of the following: Capital Markets
segment Fees from wealth and
asset management services consist primarily of investment management fees that are recognized over the period the performance obligation
for the services are provided. Investment management fees are primarily comprised of fees for investment management services and
are generally based on the dollar amount of the assets being managed. Revenues from sales
and trading are recognized when the performance obligation is satisfied and include commissions resulting from equity securities
transactions executed as agent or principal and are recorded on a trade date basis and fees paid for equity research. Revenues from other
sources in the Capital Markets segment is primarily comprised of (i) interest income from loans receivable and securities lending
activities, (ii) related net trading gains and losses from market making activities, the commitment of capital to facilitate customer
orders, (iii) trading activities from the Company's Principal Investments in equity and other securities for the Company's
account, and (iv) other income. Interest income from
securities lending activities consists of interest income from equity and fixed income securities that are borrowed from one party
and loaned to another. The Company maintains relationships with a broad group of banks and broker-dealers to facilitate the sourcing,
borrowing and lending of equity and fixed income securities in a "matched book" to limit the Company's exposure
to fluctuations in the market value or securities borrowed and securities loaned. Other revenues include
(i) net trading gains and losses from market making activities in the Company's fixed income group, (ii) carried interest
from the Company's asset management recognized as earnings from
financial assets within the scope of ASC 323 - Investments - Equity Method and Joint Ventures Revenue from Contracts with Customers .
In accordance with ASC 323 - Investments - Equity Method and Joint Ventures Auction and Liquidation
segment Revenues earned from
Auction and Liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction
or liquidation are recognized over time when the performance obligation is satisfied. The Company generally uses the cost-to-cost
measure of progress for the Company's contracts because it best depicts the transfer of services to the customer which occurs
as the Company incurs costs on its contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion
is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.
Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill the contract
include labor and other direct costs incurred by the Company related to the contract. Due to the nature of the guarantees and performance
obligations under these contracts, the estimation of revenue that is ultimately earned is complex and subject to many variables
and requires significant judgment. It is common for these contracts to contain provisions that can either increase or decrease
the transaction price upon completion of the Company's performance obligations under the contract. Estimated amounts are
included in the transaction price at the most likely amount it is probable that a significant reversal of revenue will not occur.
The Company estimates of variable consideration and determination of whether or not to include estimated amounts in the transaction
price are based on an assessment of the Company's anticipated performance under the contract taking into consideration all
historical, current and forecasted information that is reasonably available to the Company. Costs that directly relate to the contract
and expected to be recoverable are capitalized as an asset and included in advances against customer contracts in the accompanying
consolidated balance sheets. These costs are amortized as the services are transferred to the customer over the contract period,
which generally does not exceed six months, and the expense is recognized as a component of direct cost of services. If, during
the auction or liquidation sale, the Company determines that the total costs to be incurred on a performance obligation under a
contract exceeds the total estimated revenues to be earned, a provision for the entire loss on the performance obligation is recognized
in the period the loss is determined. If the Company determines that the variable consideration used
in the initial determination of the transaction price for the contract is such that the total recoveries from the auction or liquidation
will not exceed the guaranteed recovery values or advances made in accordance with the contract, the transaction price will be
reduced and a loss or negative revenue could result from the performance obligation. A provision for the entire loss as negative
revenue on the performance obligation is recognized in the period the loss is determined. Valuation and Appraisal
segment Principal Investments
– United Online and magicJack segment Service revenues from
fees charged to United Online pay accounts are recognized in the period in which fees are fixed or determinable and the related
services are provided to the customer. The Company's pay accounts generally pay in advance for their services by credit card,
PayPal, automated clearinghouse or check, and revenues are then recognized ratably over the service period. Advance payments from
pay accounts are recorded in the consolidated balance sheets as deferred revenue. In circumstances where payment is not received
in advance, revenues are only recognized if collectability is probable. Revenues from sales of the magicJack devices and access rights
represent revenues recognized from sales of the magicJack devices to retailers, wholesalers, or direct to customers, net of returns.
The transaction price for magicJack devices is allocated between equipment and service based on stand-alone selling prices. Revenues
allocated to equipment are recognized upon delivery (when control transfers to the customer), and service revenue is recognized
ratably over the service term. The Company estimates the return of direct sales as part of the transaction price using a six month
rolling average of historical returns. Revenues for hardware and shipping are recognized at the time of delivery and revenues for
services are recognized ratably over the service term. The Company recognizes revenue for hardware based on delivery terms to the
retailer and revenue for service is deferred for the delay period and recognized ratably over the remaining access right period. Revenues from access
rights renewals and mobile apps represents revenues from customers purchasing rights to access the Company's servers beyond
the access right period included in a magicJack device or magicJack service. The extended access right ranges from one to five
years. These fees charged to customers are initially deferred and recognized as revenue ratably over the extended access right
period. Revenues from access rights granted to users of the magicApp, magicJack Connect App and magicJack Spark are recognized
ratably over the access right period. Revenues from the
sale of other magicJack related products are revenues recognized from the sale of other items related to the magicJack devices
and access right renewals the Company offers its customers, including porting fees charged to customers to port their existing
phone number to a magicJack device or services, fees charged for customer to select a custom, vanity or Canadian phone number and
fees charged to customers to change their existing number. These revenues are recognized at the time of sale. Prepaid minutes revenues
are primarily from the usage and expiration of international prepaid minutes, net of chargebacks. Revenues from prepaid minutes
are recognized as minutes are used. Revenues from access
and wholesale charges are generated from access fees charged to other telecommunication carriers or providers for Interexchange
Carriers ("IXC") calls terminated to the Company's end-users, and other fees charged to telecommunication carriers
or providers for origination of calls to their 800-numbers. These revenues are recorded based on rates set forth in the respective
state and federal tariffs or negotiated contract rates, less provisions for billing adjustments. Revenues from access and wholesale
charges are recognized as calls are terminated to the network. UCaaS revenues are
recurring monthly service revenue from sales of its hosted services. Customers are billed monthly in advance for these recurring
services and in arrears for one time service charges and other certain usage charges. UCaaS revenues also includes non-recurring
revenue from the sale of hardware and network equipment. Revenues for recurring monthly service are recorded in the period the
services are provided over the term of the respective customer agreements and revenue from the sale of hardware and network equipment
is recognized in the period that the equipment is delivered and put into service. Advertising revenues consist primarily of amounts from the Company's
Internet search partner that are generated as a result of users utilizing the partner's Internet search services and amounts
generated from display advertisements. The Company recognizes such advertising revenues in the period in which the advertisement
is displayed or, for performance-based arrangements, when the related performance criteria are met. In determining whether an arrangement
exists, the Company ensures that a written contract is in place, such as a standard insertion order or a customer-specific agreement.
The Company assesses whether performance criteria have been met and whether the fees are fixed or determinable based on a reconciliation
of the performance criteria and the payment terms associated with the transaction. Brands segment
Payments received
as consideration for the grant of a license are recorded as deferred revenue at the time payment is received and recognized ratably
as revenue over the term of the license agreement. Advanced royalty payments are recorded as deferred revenue at the time payment
is received and recognized as revenue when earned. Revenue is not recognized unless collectability is probable. |
| Direct Cost of Services | (d) Direct Cost
of Services Direct cost of services
relates to service and fee revenues. Direct costs of services include participation in profits under collaborative arrangements
in which the Company is a majority participant. Direct costs of services also include the cost of consultants and other direct
expenses related to Auction and Liquidation contracts pursuant to commission and fee based arrangements in the Auction and Liquidation
segment. Direct cost of services in the Principal Investments - United Online and magicJack segment include cost of telecommunications
and data center costs, personnel and overhead-related costs associated with operating the Company's networks, servers and
data centers, sales commissions associated with multi-year service plans, depreciation of network computers and equipment, amortization
expense, third party advertising sales commissions, license fees, costs related to providing customer support, costs related to
customer billing and processing of customer credit cards and associated bank fees. Direct cost of services does not include an
allocation of the Company's overhead costs. |
| Interest Expense-Securities Lending Activities and Loan Participations Sold | (e) Interest Expense - Securities
Lending Activities and Loan Participations Sold Interest expense from
securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest
expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and
totaled $30,739, $23,039 and $12,051 for the year ended December 31, 2019, 2018 and 2017, respectively. Loan participations sold
as of December 31, 2019 totaled $12,478. Interest expense from loan participations sold totaled $1,405 for the year ended
December 31, 2019. |
| Concentration of Risk | (f) Concentration
of Risk Revenues in the Capital
Markets, Valuation and Appraisal, Principal Investments - United Online and magicJack and Brands segments are currently primarily
generated in the United States. Revenues in the Auction and Liquidation segment are primarily generated in the United States, Australia,
Canada and Europe. The Company's
activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured
creditors. Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors. The Company
seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company's
exposure to losses on any one specific liquidation services contract or concentration within any one specific industry. To mitigate
the exposure to losses on any one specific liquidations services contract, the Company sometimes conducts operations with third
parties through collaborative arrangements. The Company maintains
cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal
Deposit Insurance Corporation's ("FDIC") insurance coverage, and as a result, there is a concentration of credit
risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts. The
Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed
to parties in accordance with the collaborative arrangements. |
| Advertising Expenses | (g)
Advertising Expenses The Company expenses
advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $1,903, $2,727,
and $1,312 for the years ended December 31, 2019, 2018, and 2017 respectively. Advertising expense is included as a component of
selling, general and administrative expenses in the accompanying consolidated statements of income. |
| Share-Based Compensation | (h)
Share-Based Compensation The Company's
share-based payment awards principally consist of grants of restricted stock, restricted stock units, performance based restricted
stock units and costs associated with the Company's employee stock purchase plan. In accordance with the applicable accounting
guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company
measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation
expense in the consolidated statements of income over the requisite service or performance period the award is expected to vest.
The fair value of the liability-classified award will be subsequently remeasured at each reporting date through the settlement
date. Change in fair value during the requisite service period will be recognized as compensation cost over that period. In June 2018, the Company
adopted the 2018 Employee Stock Purchase Plan ("Purchase Plan") which allows eligible employees to purchase common
stock through payroll deductions at a price that is 85% of the market value of the common stock on the last day of the offering
period. In accordance with the provisions of ASC 718, Compensation - Stock Compensation |
| Income Taxes | (i)
Income Taxes The Company recognizes
deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated
financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial
statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences
are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit
based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided
when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods.
Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected
future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a
tax asset will be used, the related valuation allowance on such assets would be reduced. The Company recognizes
tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination
by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s
measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized
tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. |
| Cash and Cash Equivalents | (j)
Cash and Cash Equivalents The Company considers
all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
| Restricted Cash | (k)
Restricted Cash As of December 31,
2019, restricted cash balance is $471 related to one of the Company’s telecommunication suppliers. As of December 31, 2018,
restricted cash balance of $838 included $469 cash collateral for one of the Company’s telecommunication suppliers and $369
certificate of deposits collateral for certain letters of credit. |
| Securities Borrowed and Securities Loaned | (l)
Securities Borrowed and Securities Loaned Securities borrowed
and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate
the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities
loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed,
or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or
loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral
obtained, or excess collateral recalled, when deemed appropriate. The Company accounts
for securities lending transactions in accordance with ASC “Topic 210: Balance Sheet,” which requires companies to
report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and
these items are presented on a gross basis in the consolidated balance sheets. |
| Due from/to Brokers, Dealers, and Clearing Organizations | (m)
Due from/to Brokers, Dealers, and Clearing Organizations The Company clears
all of its proprietary and customer transactions through other broker-dealers on a fully disclosed basis. The amount receivable
from or payable to the clearing brokers represents the net of proceeds from unsettled securities sold, the Company’s clearing
deposits and amounts receivable for commissions less amounts payable for unsettled securities purchased by the Company and amounts
payable for clearing costs and other settlement charges. This amount also includes the cash collateral received for securities
loaned less cash collateral for securities borrowed. Any amounts payable would be fully collateralized by all of the securities
owned by the Company and held on deposit at the clearing broker. |
| Accounts Receivable | (n)
Accounts Receivable Accounts receivable
represents amounts due from the Company’s Auction and Liquidation, Valuation and Appraisal, Capital Markets, Principal Investments
— United Online and magicJack and Brands customers. The Company maintains an allowance for doubtful accounts for estimated
losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes a specific customer
identification methodology. Management also considers historical losses adjusted for current market conditions and the customers’
financial condition and the current receivables aging and current payment patterns. Account balances are charged off against the
allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does
not have any off-balance sheet credit exposure related to its customers. The Company’s bad debt expense and changes in the
allowance for doubtful accounts for the years ended December 31, 2019 and 2018 are included in Note 6. |
| Leases | (o)
Leases The Company determines
if an arrangement is, or contains, a lease at the inception date. Operating leases are included in right-of-use assets, with the
related liabilities included in operating lease liabilities in the consolidated balance sheet. Operating lease assets
represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. Operating lease assets and liabilities are recognized at the lease commencement date based on
the estimated present value of lease payments over the lease term. We use our estimated incremental borrowing rate in determining
the present value of lease payments. Variable components of the lease payments such as fair market value adjustments, utilities,
and maintenance costs are expensed as incurred and not included in determining the present value. Our lease terms include options
to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on
a straight-line basis over the lease term. We have lease agreements with lease and non-lease components which are accounted for
as a single lease component. See Note 9 for additional information on leases. |
| Property and Equipment | (p)
Property and Equipment Property and equipment
are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of
the assets. Property and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease
term or estimated useful life of the asset. |
| Loans Receivable | (q)
Loans Receivable Loans receivable are measured at historical cost and reported
at their outstanding principal balances net of any unearned income, charge-offs, unamortized deferred fees and costs on originated
loans, and for purchased loans, net of any unamortized premiums or discounts. Loan origination fees and certain direct origination
costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts
and premiums are amortized to interest income using a level yield methodology. At December 31, 2019 and 2018, loans receivable
had a carrying value of $225,848 and $38,794, respectively, with interest rates ranging from 10.0% to 12.0% and various maturity
dates through June 2022. |
| Securities and Other Investments Owned and Securities Sold Not Yet Purchased | (r) Securities
and Other Investments Owned and Securities Sold Not Yet Purchased Securities owned
consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities
sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and
thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities
are reflected currently in the results of operations. As of December 31,
2019 and 2018, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted
of the following securities:
December 31, December 31,
2019 2018
Securities and other investments owned:
Equity securities $ 353,162 $ 193,459
Corporate bonds 19,020 18,825
Other fixed income securities 8,414 3,825
Loans receivable at fair value 43,338 33,731
Partnership interests and other 27,617 23,737
$ 451,551 $ 273,577
Securities sold not yet purchased:
Equity securities $ 5,360 $ 11,130
Corporate bonds 33,436 16,338
Other fixed income securities 3,024 10,155
$ 41,820 $ 37,623 |
| Goodwill and Other Intangible Assets | (s) Goodwill and Other
Intangible Assets The Company accounts
for goodwill and intangible assets in accordance with the accounting guidance which requires that goodwill and other intangibles
with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair
value of an asset has decreased below its carrying value. Goodwill includes the excess of the purchase price over the
fair value of net assets acquired in business combinations and the acquisition of noncontrolling interests. ASC 805 requires that
goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application
of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities
to reporting units, assigning goodwill to reporting units, and determining the fair value. The Company operates five reporting
units, which are the same as its reporting segments described in Note 22. Significant judgment is required to estimate the fair
value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions.
Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. When testing goodwill
for impairment, the Company may assess qualitative factors for some or all of our reporting units to determine whether it is more
likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying
amount, including goodwill. Alternatively, the Company may bypass this qualitative assessment for some or all of the Company's
reporting units and perform a detailed quantitative test of impairment (step 1). If the Company performs the detailed quantitative
impairment test and the carrying amount of the reporting unit exceeds its fair value, the Company would perform an analysis (step
2) to measure such impairment. Based on the Company's qualitative assessments during 2019, the Company concluded that a positive
assertion can be made from the qualitative assessment that it is more likely than not that the fair value of the reporting units
exceeded their carrying values and no impairments were identified. The Company reviews
the carrying value of its amortizable intangibles and other long-lived assets for impairment at least annually or whenever events
or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived
assets is measured by comparing the carrying amount of the asset or asset group to the undiscounted cash flows that the asset or
asset group is expected to generate. If the undiscounted cash flows of such assets are less than the carrying amount, the impairment
to be recognized is measured by the amount by which the carrying amount of the asset or asset group, if any, exceeds its fair market
value. During the year ended December 31, 2019, the Company recognized no impairment of intangibles. During the year ended December
31, 2018, the Company recognized impairment of intangibles in the amount of $1,070 related to the tradename of Wunderlich Securities,
Inc. In June 2018, the Company changed the name Wunderlich Securities, Inc. to B. Riley Wealth Management, Inc. This impairment
charge is included in restructuring charge in the Company's consolidated statements of income. |
| Fair Value Measurements | (t) Fair Value Measurements The Company's assessment
of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors
specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction
to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal
market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for
identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined
by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical
or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated
by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant
to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different
levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement
in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in
its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety
requires judgment and considers factors specific to the asset or liability. The Company's securities
and other investments owned and securities sold and not yet purchased are comprised of equity securities including, common and
preferred stocks, warrants, options and common limited partnership interests; corporate bonds; other fixed income securities including,
government and agency bonds; loans receivable valued at fair value; and investments in partnerships. Investments in equity securities
that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds nonpublic
equity securities for which there is little or no public market and fair value is determined by management on a consistent basis.
For investments where little or no public market exists, management's determination of fair value is based on the best available
information which may incorporate management's own assumptions and involves a significant degree of judgment, taking into consideration
various factors including earnings history, financial condition, recent sales prices of the issuer's securities and liquidity risks.
These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments
in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests
in priority investment funds and the underlying securities held by these funds are primarily corporate and asset-backed fixed income
securities and restrictions exist on the redemption of amounts invested by the Company. The Company's partnership and investment
fund interests are valued based on the Company's proportionate share of the net assets of the partnerships and funds; the value
for these investments are derived from the most recent statements received from the general partner or fund administrator. These
partnership and investment fund interests are valued at net asset value ("NAV") in accordance with ASC "Topic 820:
Fair Value Measurements." The fair value of mandatorily
redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables,
and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present
information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of December 31,
2019 and 2018.
Financial Assets and Liabilities Measured at Fair Value
on a Recurring Basis at December 31, 2019 Using
Quoted prices in Other Significant
Fair value at active markets for observable unobservable
December 31, identical assets inputs inputs
2019 (Level 1) (Level 2) (Level 3)
Assets:
Securities and other investments owned:
Equity securities $ 353,162 $ 243,911 $ — $ 109,251
Corporate bonds 19,020 — 19,020 —
Other fixed income securities 8,414 — 8,414 —
Loans receivable at fair value 43,338 — — 43,338
Total 423,934 $ 243,911 $ 27,434 $ 152,589
Investment funds valued at net asset value (1) 27,617
Total assets measured at fair value $ 451,551
Liabilities:
Securities sold not yet purchased:
Equity securities $ 5,360 $ 5,360 $ — $ —
Corporate bonds 33,436 — 33,436 —
Other fixed income securities 3,024 — 3,024 —
Total securities sold not yet purchased 41,820 5,360 36,460 —
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — — 4,616
Total liabilities measured at fair value $ 46,436 $ 5,360 $ 36,460 $ 4,616
Financial Assets and Liabilities Measured at Fair Value
on a Recurring Basis at December 31, 2018 Using
Quoted prices in Other Significant
Fair value at active markets for observable unobservable
December 31 identical assets inputs inputs
2018 (Level 1) (Level 2) (Level 3)
Assets:
Securities and other investments owned:
Equity securities $ 193,459 $ 168,882 $ — $ 24,577
Corporate bonds 18,825 — 18,825 —
Other fixed income securities 3,825 — 3,825 —
Loans receivable at fair value 33,731 — — 33,731
Total 249,840 $ 168,882 $ 22,650 $ 58,308
Investment funds valued at net asset value (1) 23,737
Total assets measured at fair value $ 273,577
Liabilities:
Securities sold not yet purchased:
Equity securities $ 11,130 $ 11,130 $ — $ —
Corporate bonds 16,338 — 16,338 —
Other fixed income securities 10,155 — 10,155 —
Total securities sold not yet purchased 37,623 11,130 26,493 —
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,633 — — 4,633
Total liabilities measured at fair value $ 42,256 $ 11,130 $ 26,493 $ 4,633
(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC "Topic 820 Fair Value Measurements." The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. As of December 31, 2019
and 2018, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $152,589
and $58,308, respectively, or 6.6% and 3.0%, respectively, of the Company's total assets. In determining the fair value for these
Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including
where applicable, over-the-counter market trading activity. The following table summarizes
the significant unobservable inputs in the fair value measurement of level 3 financial assets and liabilities by category of investment
and valuation technique as of December 31, 2019:
Fair value at
December 31, Weighted
2019 Valuation Technique Unobservable Input Range Average
Assets:
Equity securities $ 109,251 Market approach Multiple of revenue 1.2x 1.2 x
Multiple of EBITDA 8.5x - 11.0x 9.9 x
Multiple of EV-10 0.35x 0.35 x
Market price of related security $0.70 - $3.64/share $ 3.52
Discounted cash flow Market interest rate 25.7% 25.7 %
Option pricing model Annualized volatility 75.0% 75 %
Loans receivable at fair value 43,338 Discounted cash flow Market interest rate 12.5% -13.7% 13.0 %
Market approach Market price of related security $0.70/share $ 0.70
Total level 3 assets measured at fair value $ 152,589
Liabilities:
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,616 Market approach Operating income multiple 6.0x 6.0 x The changes in Level 3
fair value hierarchy during the year ended December 31, 2019 and 2018 are as follows:
Level 3 Level 3 Changes During the Period Level 3
Balance at Fair Relating to Purchases, Transfer in Balance at
Beginning of Value Undistributed Sales and and/or out End of
Year Adjustments Earnings Settlements of Level 3 Period
Year Ended December 31, 2019
Equity securities $ 24,577 $ (4,809 ) $ 1,424 $ 91,243 $ (3,184 ) $ 109,251
Loans receivable at fair value 33,731 10,999 1,621 (3,013 ) — 43,338
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,633 — (17 ) — — 4,616
Year Ended December 31, 2018
Equity securities $ 28,346 $ (4,220 ) $ 578 $ 20,843 $ (20,970 ) $ 24,577
Loans receivable at fair value 33,713 35 300 (317 ) — 33,731
Partnership interests and other 26,104 1,108 607 (26,087 ) (1,732 ) —
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,478 — 155 — — 4,633 The amount reported in
the table above for the year ended December 31, 2019 and 2018 includes the amount of undistributed earnings attributable to the
noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the consolidated financial
statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other
liabilities approximate fair value based on the short-term maturity of these instruments. The carrying amount of
the senior notes payable and term loan approximate fair value because the contractual interest rates or effective yields of such
instruments are consistent with current market rates of interest for instruments of comparable credit risk. During the year ended December 31, 2019 and 2018, there
were no assets or liabilities measured at fair value on a non-recurring basis. |
| Derivative and Foreign Currency Translation | (u)
Derivative and Foreign Currency Translation The Company periodically
uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain Auction and Liquidation
engagements with operations outside the United States. The Company did not use any derivative contracts during the year ended December
31, 2019. The Company’s use of derivatives consisted of the purchase of forward exchange contracts in the amount of $42,108
Canadian dollars that were settled during the first and second quarter of 2018. The net loss from
forward exchange contracts was $91 during the year ended December 31, 2018. This amount is reported as a component of selling,
general and administrative expenses in the consolidated statements of income. The Company transacts
business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined
to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United
States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated
into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included
in stockholders’ equity as a component of accumulated other comprehensive income in the accompanying consolidated balance
sheets. Transaction (losses) gains were ($238), 1,294, and ($786) during the years ended December 31, 2019, 2018 and 2017,
respectively. These amounts are included in selling, general and administrative expenses in the Company’s consolidated statements
of income. |
| Common Stock Warrants | (v)
Common Stock Warrants The
Company issued 821,816 warrants to purchase common stock of the Company (the “Wunderlich Warrants”) in connection with
the acquisition of Wunderlich Securities, Inc. (“Wunderlich”) on July 3, 2017. The Wunderlich Warrants entitle the
holders of the warrants to acquire shares of the Company’s common stock from the Company at an exercise price of $17.50 per
share, subject to, among other matters, the proper completion of an exercise notice and payment. The exercise price and the number
of shares of Company common stock issuable upon exercise are subject to customary anti-dilution and adjustment provisions, which
include stock splits, subdivisions or reclassifications of the Company’s common stock. The Wunderlich Warrants expire on
, 2022. On May 16, 2019, the Company repurchased
638,311 warrants for $2,777 ($4.35 per warrant) which is included in common stock warrants repurchased in the consolidated statements
of equity. As of December 31, 2019, Wunderlich Warrants to purchase 183,505 shares of common stock were outstanding. On
October 28, 2019, the Company issued 200,000 warrants to purchase common stock of the Company (the “BR Brands Warrants”)
in connection with the acquisition of BR Brand Holdings LLC (“BR Brand”). The BR Brand Warrants entitle the holders
of the warrants to acquire shares of the Company’s common stock from the Company at an exercise price of $26.24 per share.
BR Brand Warrants
Exercise Expiration Issued
and Warrants Warrants Issued
and
Price Date Year Issued Repurchased End of Year
For the year ended December 31, 2018
Wunderlich Warrants $ 17.50 July 3, 2022 821,816 - - 821,816
For the year ended December 31, 2019
Wunderlich Warrants $ 17.50 July 3, 2022 821,816 - (638,311 ) 183,505
BR Brand Warrants $ 26.24 October 28, 2024 - 200,000 - 200,000
Total 821,816 200,000 (638,311 ) 383,505 |
| Equity Investment | (w)
Equity Investment bebe stores, inc. At December 31, 2019,
the Company had a 30.5% ownership interest in bebe stores, inc. (“bebe”). The equity ownership in bebe is accounted
for under the equity method of accounting and is included in prepaid expenses and other assets in the consolidated balance sheets. National Holdings
Corporation On November 14, 2018,
the Company entered into an agreement to acquire shares of National Holdings Corporation (“National Holdings”), a Nasdaq-listed
issuer, from Fortress Biotech, Inc. for an aggregate purchase price totaling approximately $22,900. The transaction was completed
in two tranches. In the first tranche, which was completed in the fourth quarter of 2018, the Company acquired shares representing
24% of the total outstanding shares of National Holdings. The second tranche was completed in the first quarter of 2019. As of
December 31, 2019, the Company had purchased 6,159,550 shares of National Holdings’ common stock, representing 46.8% of National
Holdings’ outstanding shares, at $3.25 per share. The carrying value for the National Holdings investment is included in
prepaid expenses and other assets in the consolidated balance sheets. The equity ownership in National Holdings is accounted for
under the equity method of accounting. |
| Loan Participations Sold | (x)
Loan Participations Sold As of December 31,
2019, the Company has sold investments to third parties (“Participants”) that are accounted for as secured borrowings
under ASC Topic 860, Transfers and Servicing. Under ASC Topic 860, a partial loan transfer does not qualify for sale accounting
in order for sale treatment to be allowed. A participation or other partial loan transfer that meets the definition of a participating
interest is classified as loan receivable and the portion transferred is recorded as a secured borrowing under loan participations
sold in the consolidated balance sheet. The Participants are entitled to payments made by the borrower of the related loan equal
to the current loan participations sold outstanding at the interest rates for the respective investment. In the event that the
borrower defaults, the Participants have rights to payments from such borrower, but do not have recourse to the Company. The terms
of the loan participations sold are commensurate with the terms of the related loan. As of December 31,
2019, the Company had entered into participation agreements for a total of $12,478. In addition, the interest income and interest
expense related to the loan participations sold is presented gross on the consolidated statement of income. |
| Supplemental Non-cash Disclosures | (y)
Supplemental Non-cash Disclosures During
the year ended December 31, 2019, non-cash activities included the conversion of loans receivable in the amount of $12,209
into securities and other investments owned, the recognition of new operating lease issuance
of warrants to purchase the Company’s stock in the amount of $990 related to the purchase of BR Brand. During the year ended
December 31, 2018, non-cash activities included the conversion of a loan receivable in the amount of $16,867 and accrued interest
receivable of $51 into an equity investment that totaled $16,918. |
| Reclassifications | (z) Reclassifications
During the years ended
December 31, 2018 and 2017, interest income earned on loans of $6,479 and $2,728, respectively, was previously included in services
and fees income in the capital markets segment. These interest income amounts have been reclassified and reported in interest income
– loans and securities lending to conform to the 2019 presentation. During the years ended December 31, 2018 and 2017,
expenses of $16,826 and $14,876, respectively, were previously included in direct cost of services in the valuation and appraisal
segment. These expenses have been reclassified and reported in selling, general and administrative expenses to conform to the 2019
presentation. |
| Variable Interest Entity | (aa)
Variable Interest Entity In 2018, the operations
of GACP II, LP, a private debt investment limited partnership (the “Partnership”) commenced operations. The Company’s
investment in the Partnership is a variable interest entity (“VIE”) since the unaffiliated limited partners do not
have substantive kick- out or participating rights to remove the Company’s subsidiary that is the general partner managing
the Partnership. The Company has determined that it is not the primary beneficiary due to the fact that its fee arrangements are
considered at-market and thus not deemed to be variable interests, and it does not hold any other interests in the Partnership
that are considered to be more than insignificant. The Company determines whether it is the primary beneficiary of a VIE at the
time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is
the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly
through related parties. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent
that the Company is not the primary beneficiary, a quantitative analysis may also be performed. The carrying value
of the Company’s investments in the VIE that was not consolidated is shown below.
December 31,
Partnership investments $ 12,780
Due from related party 12
Maximum exposure to loss $ 12,792 |
| Recent Accounting Standards | (ab)
Recent Accounting Standards Not
yet adopted In January 2017, the
Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2017-04,
Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard simplifies the
accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical
purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds
its fair value, not to exceed the carrying amount of goodwill. The revised guidance will be applied prospectively and is effective
for calendar year-end SEC filers for its annual or any interim goodwill impairment tests in fiscal years beginning after December
15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January
1, 2017. The adoption of this accounting update will not have a material impact on our consolidated
financial statements. In June 2016, the
FASB issued ASU 2016-13, Financial Instruments − Credit Losses (Topic 326): In May 2019, the FASB issued ASU
No. 2019-05, Financial Instruments − Credit Losses (Topic 326); Targeted Transition Relief," which allows entities
to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments that (1) were previously recorded
at amortized cost and (2) are within the scope of ASC 326-20 if the instruments are eligible for the fair value option under ASC
825-10. The
Company will adopt the new credit losses standard effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05,
the Company will elect the irrevocable fair value option for all outstanding loans receivable that are currently measured at amortized
cost. Under the fair value option, loans receivable will be measured at each reporting period based upon their exit value in an
orderly transaction and unrealized gains or losses from changes in fair value will be recorded in services and fee on the consolidated
statements of income. These loans will no longer be subject to evaluation for impairment through an allowance for loan loss as
such losses will be captured through fair value changes. The Company has determined that the impact of adopting ASC 326 is immaterial
to the consolidated financial statements. Recently adopted In February 2016,
FASB issued ASU. 2016-02: Leases (Topic 842) which requires a lessee to recognize a ROU asset and lease liability on the balance
sheet for all leases with a contract term longer than 12 months and provide enhanced disclosures. The Company adopted the new standard
effective January 1, 2019 using the modified retrospective method. The Company elected the 'package of practical expedients,'
which permits the Company not to reassess under the new standard the Company's prior conclusions about lease identification,
lease classification and initial direct costs. Upon adoption of ASC 842 on January 1, 2019, the Company recognized $67,519 operating
lease liabilities with corresponding operating lease right-of-use assets. See Note 9 to the accompanying financial statements for
additional information on leases. In February 2018, the FASB issued ASU 2018-02, Income Statement
- Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
that provides for the reclassification from accumulated other comprehensive income to retained earnings for stranded effects resulting
from the Tax Reform Act. The accounting update should be applied either in the period of adoption or retrospectively to each period
in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. The accounting
update is effective for the fiscal year beginning after December 15, 2018. The adoption of this standard did not have a material
impact to the Company's financial condition and results of operations. In August 2016, the
FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU
2016-15"), which clarifies how companies present and classify certain cash receipts and cash payments in the statement of
cash flows. ASU 2016-15 was effective for us in our first quarter of fiscal year 2019. The adoption of this standard did not have
a material impact to the Company's financial condition and results of operations. |
