| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES ( a) Principles of Consolidation and Basis
of Presentation The condensed consolidated
financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed
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) National Asset Management, Inc. (“NAM”), a federally-registered investment adviser providing
asset management advisory services to retail clients for a fee based upon a percentage of assets managed. NAM has a majority voting interest
in Innovation X Management, LLC (“Innovation X”), which together serve as the investment manager of an investment fund (see
Variable Interest Entities below). Because NAM has the majority voting interest in Innovation X, the results of operations of Innovation
X are included in the Company’s consolidated financial statements, and the amount attributable to the other investor is recorded as a
non-controlling interest. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to
interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain
information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.
In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for
a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed
consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements
and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the
SEC on March 4, 2021. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative
of the operating results to be expected for the full fiscal year or any future periods. Revision of Prior Period
Financial Statements In connection with the preparation of the Company’s condensed
consolidated financial statements for the three months ended September 30, 2021, the Company identified an error that was not material
related to the consolidation of certain Variable Interest Entities (“VIE’s) which primarily resulted in a gross up of the
balance sheet to reflect funds held in trust within prepaid expenses and other assets and the recording of temporary equity. In
accordance with SAB No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the error and determined that the related
impact did not, either individually or in the aggregate, materially misstate previously issued consolidated financial statements. A
summary of revisions to certain previously reported financial information presented herein is included in Note 19. (b) Use of Estimates The preparation of the condensed
consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the condensed 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 and loans receivables,
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, sales
returns and allowances and contingencies. 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. (c) 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 $9,945 and $10,530 for
the three months ended September 30, 2021 and 2020, respectively, and $39,391 and $29,253 for the nine months ended September 30, 2021
and 2020, respectively. There were no loan participations sold outstanding as of September 30, 2021 and loan participations sold totaled
$13,919, at September 30, 2020. Interest expense from loan participations sold totaled $152 and $445 for the three months ended September
30, 2021 and 2020, respectively, and $878 and $1,416 for the nine months ended September 30, 2021 and 2020, respectively. (d) Concentration of
Risk Revenues in the Capital Markets,
Financial Consulting, Wealth Management, Brands and Principal Investments — United Online and magicJack 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. (e) Advertising Expenses
The Company expenses advertising
costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $808 and $560 for the three months
ended September 30, 2021 and 2020, respectively, and $1,964 and $2,264 for the nine months ended September 30, 2021 and 2020, respectively.
Advertising expense is included as a component of selling, general and administrative expenses in the accompanying condensed consolidated
statements of operations. (f) Share-Based Compensation
The Company’s share-based
payment awards principally consist of grants of restricted stock, 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 condensed consolidated statements of operations over the requisite
service or performance period the award is expected to vest. 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 Accounting Standards Codification (ASC) “Topic 718: Compensation — Stock Compensation”, the Company
is required to recognize compensation expense relating to shares offered under the Purchase Plan. For the three months ended September
30, 2021 and 2020, the Company recognized compensation expense of $132 and $96, respectively, related to the Purchase Plan. For the nine
months ended September 30, 2021 and 2020, the Company recognized compensation expense of $474 and $320, respectively, related to the Purchase
Plan. (g) Income Taxes The Company recognizes deferred
tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed 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. (h) 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. (i) Restricted
Cash As of September 30, 2021,
restricted cash included $927 of cash collateral for foreign exchange contracts and leases. As of December 31, 2020, restricted cash included
$764 of cash collateral for foreign exchange contracts and $471 related to one of the Company’s telecommunication suppliers. (j) 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 condensed consolidated balance sheets. (k) Property and Equipment
Property and equipment are
stated at cost. Depreciation is 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.
Depreciation expense on property and equipment was $986 and $967 for the three months ended September 30, 2021 and 2020, respectively,
and $2,890 and $2,798 for the nine months ended September 30, 2021 and 2020, respectively. (l) Loans Receivable
Under ASC “Topic 326:
Financial Instruments – Credit Losses” (“ASC 326”), the Company elected the irrevocable fair value option for
all outstanding loans receivable that were previously measured at amortized cost. Under the fair value option, loans receivables are measured
at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value
are recorded in the condensed consolidated statements of operations. These loans are no longer subject to evaluation for impairment through
an allowance for loan loss as such losses will be captured through fair value changes. The impact of adopting ASC 326 was immaterial to
the consolidated financial statements. Loans receivable, at fair
value totaled $350,762 and $390,689 as of September 30, 2021 and December 31, 2020, respectively. The loans have various maturities
through March 2027. As of September 30, 2021 and December 31, 2020, the historical cost of loans receivable accounted for under the
fair value option was $356,408 and $405,064, respectively, which included principal balances of $365,882 and $416,401, respectively, and
unamortized costs, origination fees, premiums and discounts, totaling $9,474 and $11,337, respectively. During the three months ended
September 30, 2021 and 2020, the Company recorded net unrealized losses of $1,317 and net unrealized gains of $141, respectively, on
the loans receivable at fair value and during the nine months ended September 30, 2021 and 2020, net unrealized gains of $8,729 and net
unrealized losses of $21,835, respectively, on the loans receivable at fair value, which is included in trading income (losses) and fair
value adjustments on loans on the condensed consolidated statements of operations. The Company may periodically
provide limited guarantees to third parties for loans that are made to investment banking and lending clients. As of September 30,
2021, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc. (“B&W”)
as further described in Note 14. In accordance with the new credit loss standard, the Company evaluates the need to record an allowance
for credit losses for these loan guarantees since they have off-balance sheet credit exposures. As of September 30, 2021, the Company
has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral
to protect the Company from any credit loss exposure. Interest income on loans
receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs,
origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated
statements of operations. 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. (m) Securities and
Other Investments Owned and Securities Sold Not Yet Purchased Securities and other
investments 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 September 30, 2021
and December 31, 2020, the Company’s securities and other investments owned and securities sold not yet purchased at fair value
consisted of the following securities:
September 30, December 31,
2021 2020
Securities and other investments owned:
Equity securities $ 1,276,191 $ 697,288
Corporate bonds 5,401 3,195
Other fixed income securities 4,436 1,913
Partnership interests and other 66,072 74,923
$ 1,352,100 $ 777,319
Securities sold not yet purchased:
Equity securities $ 415,901 $ 4,575
Corporate bonds 2,025 4,288
Other fixed income securities 1,285 1,242
$ 419,211 $ 10,105 (n) 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 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 common and preferred stocks and warrants, corporate
bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in
Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks
and warrants 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 is 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.” Securities and other investments
owned also include investments in nonpublic entities that do not have a readily determinable fair value and do not report NAV per share.
These investments are accounted for using a measurement alternative under which they are measured at cost and adjusted for observable
price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed
during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For
these transactions to be considered observable price changes of the same issuer, we evaluate whether these transactions have similar rights
and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold.
Any investments adjusted to their fair value by applying the measurement alternative are disclosed as nonrecurring fair value measurements,
including the level in the fair value hierarchy that was used. As of September 30, 2021 and December 31, 2020, investments in nonpublic
entities valued using a measurement alternative of $57,752 and $26,948, respectively, are included in securities and other investments
owned in the accompanying condensed consolidated balance sheets. Funds held in trust represents
U.S. treasury bills that were purchased with funds raised through the initial public offerings of B. Riley Principal 150 Merger Corporation
(“BRPM 150”) and B. Riley Principal 250 Merger Corporation (“BRPM 250”), consolidated special purpose acquisition
corporations (“SPACs”). The funds raised are held in trust accounts that are restricted for use and may only be used for
purposes of completing an initial business combination or redemption of the class A public common shares of the SPAC’s as set forth
in their respective trust agreements. The funds held in trust are included within Level 1 of the fair value hierarchy and included in
prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. The Company has warrant liabilities related to warrants of the SPAC’s
that are held by investors in BRPM 150 and BRPM 250. The warrants are accounted for as liabilities in accordance with ASC “Topic
815: Derivatives and Hedging,” and are measured at fair value at inception and on a recurring basis using quoted prices in over-the-counter
markets. Warrant liabilities are included in accrued expenses and other liabilities in the accompanying condensed consolidated balance
sheets with changes in fair value that amounted to $1,999 during the nine months ended September 30, 2021 included within gain on extinguishment
of debt and other as part of other income (expense) in the condensed consolidated statements of operations. 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 September 30, 2021 and December 31, 2020.
Financial Assets and Liabilities
Measured at Fair Value on a
Fair value at September 30, 2021 Quoted prices in active markets for identical assets Other observable inputs Significant unobservable inputs
Assets:
Funds held in trust account $ 345,016 $ 345,016 $ — $ —
Securities and other investments owned:
Equity securities 1,218,439 885,474 — 332,965
Corporate bonds 5,401 — 5,401 —
Other fixed income securities 4,436 — 4,436 —
Total securities and other investments owned 1,228,276 885,474 9,837 332,965
Loans receivable, at fair value 350,762 — — 350,762
Total assets measured at fair value $ 1,924,054 $ 1,230,490 $ 9,837 $ 683,727
Liabilities:
Securities sold not yet purchased:
Equity securities $ 415,901 $ 415,901 $ — $ —
Corporate bonds 2,025 — 2,025 —
Other fixed income securities 1,285 — 1,285 —
Total securities sold not yet purchased 419,211 415,901 3,310 —
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,196 — — 4,196
Warrant liabilities 8,466 8,466 — —
Total liabilities measured at fair value $ 431,873 $ 424,367 $ 3,310 $ 4,196
Financial Assets and Liabilities Measured at Fair Value on a
Fair value at December 31 2020 Quoted prices in active markets for identical assets Other observable inputs Significant unobservable inputs
Assets:
Securities and other investments owned:
Equity securities $ 670,340 $ 521,048 $ — $ 149,292
Corporate bonds 3,195 — 3,195 —
Other fixed income securities 1,913 — 1,913 —
Total securities and other investments owned 675,448 521,048 5,108 149,292
Loans receivable, at fair value 390,689 — — 390,689
Total assets measured at fair value $ 1,066,137 $ 521,048 $ 5,108 $ 539,981
Liabilities:
Securities sold not yet purchased:
Equity securities $ 4,575 $ 4,575 $ — $ —
Corporate bonds 4,288 — 4,288 —
Other fixed income securities 1,242 — 1,242 —
Total securities sold not yet purchased 10,105 4,575 5,530 —
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,700 — — 4,700
Total liabilities measured at fair value $ 14,805 $ 4,575 $ 5,530 $ 4,700 As of September 30, 2021 and
December 31, 2020, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $683,727
and $539,981, respectively, or 13.5% and 20.3%, 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 September 30, 2021:
Fair value at
September 30, Valuation Unobservable Weighted
2021 Technique Input Range Average
Assets:
Equity securities 323,773 Market approach Multiple of EBITDA 3.5x - 15.00x $ 5.65
Multiple of PV-10 0.65x 0.65 x
Multiple of Sales 1.55x 1.55 x
Market price of related security $0.44 - 10.12 $ 8.34
9,192 Option pricing model Annualized volatility 0.25 - 17.41 0.86
Loans receivable at fair value 350,762 Discounted cash flow Market interest rate 6.0% - 37.5% 14.8 %
Total level 3 assets measured at fair value $ 683,727
Liabilities:
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,196 Market approach Operating income multiple 6.0x 6.0 x The changes in Level 3 fair
value hierarchy during the nine months ended September 30, 2021 and 2020 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
Nine Months Ended September 30, 2021
Equity securities $ 149,292 $ 52,102 $ — $ 125,794 $ 5,777 $ 332,965
Loans receivable at fair value 390,689 9,059 9,003 (57,989 ) — 350,762
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,700 — (504 ) — — 4,196
Warrant liabilities — — — 10,466 (10,466 ) —
Nine Months Ended September 30, 2020
Equity securities $ 109,251 $ (11,314 ) $ — $ 4,984 $ (672 ) $ 102,249
Loans receivable at fair value 43,338 (21,834 ) 3,134 93,853 225,848 344,339
Mandatorily redeemable noncontrolling interests issued after November 5,
2003 4,616 — (154 ) — — 4,462 Under ASC 326, the Company
elected the irrevocable fair value option for all outstanding loans receivable that were measured at amortized cost as of December 31,
2019. The loans receivable, at fair value are included in transfers into Level 3 fair value assets in the above table. The amount reported in the
table above for the nine months ended September 30, 2021 and 2020 includes the amount of undistributed earnings attributable to the noncontrolling
interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed 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. Changes in the Level 3 fair value hierarchy during the nine months
ended September 30, 2021 included the fair value of warrant liabilities associated with BRPM 150 and BRPM 250. The value of these warrants
transferred from Level 3 to Level 1 of the fair value hierarchy when the public warrants started trading in the over-the-counter markets
after the initial public offering. As of September 30, 2021
and December 31, 2020, the senior notes payable had a carrying amount of $1,362,847 and $870,783, respectively, and fair value of $1,421,533
and $898,606, respectively. The carrying amount of the term loans approximates fair value because the effective yield of such instruments
are consistent with current market rates of interest for instruments of comparable credit risk. The investments in nonpublic
entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in
trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations. These investments
are evaluated on a nonrecurring basis based on the observable price changes in orderly transactions for the identical or similar investment
of the same issuer. Further adjustments are not made until another observable transaction occurs. Therefore, the determination of fair
values of these investments in nonpublic entities that do not report NAV does not involve significant estimates and assumptions or subjective
and complex judgments. Investments in nonpublic entities that do not report NAV are subject to a qualitative assessment for indicators
of impairment. If indicators of impairment are present, the Company is required to estimate the investment’s fair value and immediately
recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value. The following table sets
forth the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of September 30, 2021.
This investment was measured due to an observable price change during the nine months ended September 30, 2021.
Fair Value Measurement Using
Total Quoted
prices in active markets for identical assets Other
observable inputs Significant
unobservable inputs
As of September 30, 2021
Investments in nonpublic entities that do not report NAV $ 2,536 $ — $ 2,536 $ —
As of December 31, 2020
Investments in nonpublic entities that do not report NAV $ — $ — $ — $ — During the nine months ended
September 30, 2021 and 2020, except for the impact of the intangible impairment charge in 2020 as described in Note 7 – Goodwill and Intangible
Assets, there were no additional assets or liabilities measured at fair value on a non-recurring basis. (o) Derivative and
Foreign Currency Translation The Company periodically
uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain loans receivable and Auction
and Liquidation engagements with operations outside the United States. As of September 30, 2021 and December 31, 2020, forward exchange
contracts in the amount of 6,000 Euros were outstanding. The forward exchange contracts
we |
