Telkonet, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

16. FAIR VALUE MEASUREMENTS (Tables)

16. FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2012

	Level 1		Level 2		Level 3		Total
Goodwill-SSI	$	–	$	–	$	2,774,016	$	2,774,016
Total	$	–	$	–	$	2,774,016	$	2,774,016

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 assets (Goodwill-SSI) measured on a non-recurring basis for the years ended December 31, 2012 and 2011:

	2012		2011
Balance at beginning of year	$	2,774,016	$	2,774,016
Impairment of carried value		–		(3,100,000	)
Balance at end of period	$	2,774,016	$	2,774,016

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (derivative liability) for the years ended December 31, 2012 and 2011:

	2011
Balance at beginning of year	$	1,901,775
Repayment of debt, cancellation of warrants and related derivative liability		(1,158,730	)
Change in fair value of derivative liability		(172,476	)
Retirement of derivative liability related to warrant obligation		(570,569	)
Balance at end of year	$	–

- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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