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Derivatives | 6 Months Ended
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Jun. 30, 2023
Derivatives |
Derivatives | 13. Derivatives The Company conducts a large portion of its operations in international markets, which subjects it to foreign currency fluctuations. The most significant foreign currency exposures occur when revenue and associated accounts receivable are collected in one currency and expenses to generate that revenue are incurred in another currency. The Company is also subject to wage inflation and other government mandated increases and operating expenses in Asian countries where the Company has the majority of its operations. The Company’s primary inflation and exchange rate exposure relates to payroll, other payroll costs and operating expenses in the Philippines, India, Sri Lanka and Israel. In addition, although most of the Company’s revenue is denominated in U.S. dollars, a significant portion of total revenues is denominated in Canadian dollars, Pound Sterling and Euros. The Company’s policy is to enter derivative instrument contracts with terms that coincide with the underlying exposure being hedged for a period of up to 12 months. As such, the Company’s derivative instruments are expected to be highly effective. For derivative instruments that are designated and qualify as cash flow hedges, the entire change in fair value of the hedging instrument is recorded to Other comprehensive income (loss). Upon settlement of these contracts, the change in the fair value recorded in Other comprehensive income (loss) is reclassified to earnings and included as part of Direct operating costs. For derivative instruments that are not designated as hedges, any change in fair value is recorded directly in earnings as part of Direct operating costs. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking hedge transactions. The Company does not hold or issue derivatives for trading purposes. All derivatives are recognized at their fair value and classified based on the instrument’s maturity date. The total notional amount for outstanding derivatives designated as hedges was $10.9 million and $14.2 million as of June 30, 2023 and December 31, 2022, respectively. The following table presents the fair value of derivative instruments included within the condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Balance Sheet Location | ​ | Fair Value
​ | ​ | ​ | ​ | June 30, | ​ | December 31,
​ |  | ​ |  | 2023 |  | 2022
Derivatives designated as hedging instruments: |  |  |  | ​ |  |  | ​ |
Foreign currency forward contracts |  | Prepaid expenses and other current assets | ​ | $ | 166 | ​ | $ | -
Foreign currency forward contracts |  | Accrued expenses and other | ​ | $ | - | ​ | $ | 365
​ The effect of foreign currency forward contracts designated as cash flow hedges on the condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 were as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the Three Months Ended | ​ | For the Six Months Ended
​ |  | June 30, | ​ | June 30,
​ |  | 2023 |  | 2022 |  | 2023 |  | 2022
Net gain (loss) recognized in OCI(1) | ​ | $ | 2 | ​ | $ | (744) | ​ | $ | 244 | ​ | $ | (822)
Net loss reclassified from accumulated OCI into income(2) | ​ | $ | 106 | ​ | $ | 203 | ​ | $ | 287 | ​ | $ | 286
Net gain recognized in income(3) | ​ | $ | - | ​ | $ | - | ​ | $ | - | ​ | $ | -
​
(1) | Net change in fair value of the effective portion classified into other comprehensive income (“OCI”)
(2) | Effective portion classified within direct operating costs.
(3) | There were no ineffective portions for the period presented.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
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