Fair Value Measurements
|12 Months Ended
Dec. 31, 2021
|Fair Value Disclosures [Abstract]
|Fair Value Measurements
. Fair Value Measurements
The following table presents assets and liabilities which are measured at fair value on a recurring basis as of December 31, 2021:
The following table presents financial liabilities which are measured at fair value on a recurring basis as of December 31, 2020:
The Company measures the fair value of its financial assets and liabilities using the highest level of inputs that are available as of the measurement date. The carrying amounts of cash, accounts receivable, and accounts payable approximate their fair value due to the immediate or short-term maturity of these financial instruments. See Note 11 Interest Rate Swap for additional information on the interest rate swap.
The Company’s First Lien Term Loan approximates fair value to the debt’s variable interest rate terms. As of December 31, 2021 and 2020, the fair value of the Company’s First Lien Term Loan approximated its carrying value.
As of December 31, 2021, the Company recognized a Level 3 contingent consideration liability in connection with the Downtowner Car Wash acquisition. The Company measured its contingent consideration liability arising from its 2021 acquisition using Level 3 unobservable inputs. The contingent consideration liability is associated with the achievement of certain targets and is estimated at each balance sheet date by considering among other factors, results of completed periods and the Company's most recent financial projection for future periods subject to earn-out payments. There are two components to the contingent consideration: a payment when the Company obtains the certificate of occupancy for the car wash and opens to the public in 2023 and an annual payment based on certain financial metrics of the business. A change in the forecasted revenue or projected opening dates could result in a significantly lower or higher fair value measurement. The Company determined that there were no significant changes to the unobservable inputs that would have resulted in a change in fair value of this contingent consideration liability at December 31, 2021.
As of December 31, 2020, there were no Level 3 financial assets or financial liabilities measured at fair value on a recurring basis.
During the years ended December 31, 2021 and 2020, there were no transfers between fair value measurement levels.