CPSI 2017 Annual Report

86 Level 3: Unobservable inputs that are not corroborated by market data. The accrued contingent consideration depicted below represents the remaining potential earnout incentive for former Rycan shareholders, relating to the purchase of Rycan by HHI in 2015. As a result of 2017 Rycan performance, a payout of $625,000 for the year ended December 31, 2017, was paid prior to December 31, 2017. We have estimated the fair value of the remaining contingent consideration based on the amount of revenue we expect to be earned by Rycan for the year ending December 31, 2018 in accordance with the agreement. Fair Value at December 31, 2017 Using Quoted Prices in Carrying Active Markets for Significant Other Significant Amount at Identical Assets Observable Inputs Unobservable Inputs (In thousands) 12/31/2017 (Level 1) (Level 2) (Level 3) Description Contingent consideration. . . . . . . . . . . . . . . $ 586 $ — $ — $ 586 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 586 $ — $ — $ 586 The following table summarizes the carrying amounts and fair values of certain assets at December 31, 2016: Fair Value at December 31, 2016 Using Quoted Prices in Carrying Active Markets for Significant Other Significant Amount at Identical Assets Observable Inputs Unobservable Inputs (In thousands) 12/31/2016 (Level 1) (Level 2) (Level 3) Description Contingent consideration. . . . . . . . . . . . . . . $ 1,120 $ — $ — $ 1,120 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,120 $ — $ — $ 1,120 The carrying amount of other financial instruments reported in the consolidated balance sheets for current assets and current liabilities approximates their fair values because of the short-term nature of these instruments.