3.	Selected Balance Sheet Data

Other Assets

Other assets consisted of the following (in thousands):

 

		Current								Non-Current
		September 30,				December 31,				September 30,				December 31,
		2015				2014				2015				2014
Due from independent contractors, net (1) (2)		$	1,581			$	1,577			$	5,184			$	1,820
Security deposits			—				—				1,299				1,240
Customer trust accounts and other			1,823				1,262				102				222
		$	3,404			$	2,839			$	6,585			$	3,282

 

(1)

Includes allowance for doubtful accounts related to current of $261,000 as of September 30, 2015 and $193,000 as of December 31, 2014, respectively. The Company recorded a provision for bad debt expense of $48,000 and $44,000 and wrote off $24,000 and $23,000 of these receivables for the three months ended September 30, 2015 and, 2014, respectively. The Company recorded a provision for bad debt expense of $127,000 and $86,000 and wrote off $59,000 and $110,000 of these receivables for the nine months ended September 30, 2015 and, 2014, respectively.

(2)

Represents amounts advanced, notes receivable and other receivables due from the Company’s sales and financing professionals. The notes receivable along with interest, are typically collected from future commissions and are generally due in one to five years. Any cash receipts on notes are applied first to unpaid principal balance prior to any income being recognized.

Deferred Compensation and Commissions

Deferred compensation and commissions consisted of the following (in thousands):

 

		September 30, 2015				December 31, 2014
SARs liability		$	21,184			$	20,542
Commissions payable to sales and financing professionals			12,451				12,176
Deferred compensation liability			4,951				3,863
		$	38,586			$	36,581

 

SARs Liability

Prior to the IPO, certain employees of the Company were granted stock appreciation rights (“SARs”) under a stock-based compensation program assumed by MMC. In connection with the IPO, the SARs agreements were revised, and the MMC liability of $20.0 million for the SARs was frozen at March 31, 2013, and was transferred to MMI through a capital distribution. The SARs liability will be settled with each participant in installments upon retirement or departure. Under the revised agreements, MMI is required to accrue interest on the outstanding balance beginning on January 1, 2014 at a rate based on the 10-year treasury note plus 2%. The rate resets annually. The rate at January 1, 2015 and 2014 was 4.173% and 5.03%, respectively. MMI recorded interest expense related to this liability of $214,000 and $236,000, for the three months ended September 30, 2015 and 2014, respectively and $642,000 and $738,000 for the nine months ended September 30, 2015 and 2014, respectively. During 2014, the Company reduced the SARs liability balance in the amount of $412,000 related to a distribution for the settlement of FICA taxes payable on behalf of certain participants.

Commissions Payable

Certain investment sales professionals have the ability to earn additional commissions after meeting certain annual revenue thresholds. These commissions are recognized as cost of services in the period in which they are earned. The Company has the ability to defer payment of certain commissions, at its election, for up to three years. Commissions payable that are not expected to be paid within twelve months are classified as non-current liabilities.

Deferred Compensation Liability

A select group of management is eligible to participate in a Deferred Compensation Plan. The plan is a 409A plan and permits the participant to defer compensation up to limits as determined by the plan. The Company elected to fund the Deferred Compensation Plan through company owned variable life insurance policies. The Deferred Compensation Plan is managed by a third-party institutional fund manager, and the deferred compensation and investment earnings are held as a Company asset in a rabbi trust, which is recorded in assets held in rabbi trust in the accompanying condensed consolidated balance sheets. The assets in the trust are restricted unless the Company becomes insolvent, as defined in the Deferred Compensation Plan, in which case the trust assets are subject to the claims of MMI’s creditors. The Company may also, in its sole and absolute discretion, elect to withdraw at any time all or a portion of the trust assets by an amount by which the fair market value of the trust assets exceeds 110% of the aggregate amount in the Deferred Compensation Plan’s participants’ accounts.

The net change in the carrying value of the assets held in the rabbi trust and the net change in the carrying value of the deferred compensation obligation, each exclusive of additional contributions and distributions consisted of the following (in thousands):

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2015				2014				2015				2014
Increase (decrease) in the carrying value of the assets held in the rabbi trust (1)		$	(351	)		$	(51	)		$	(340	)		$	177
Increase (decrease) in the carrying value of the deferred compensation obligation (2)		$	(307	)		$	(32	)		$	(248	)		$	201

 

(1)	Recorded in other income (expense), net in the condensed consolidated statements of net and comprehensive income.

(2)	Recorded in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income.