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Financial Derivatives | 6 Months Ended
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Feb. 29, 2020
Derivative Instruments And Hedges [Abstract] |
Financial Derivatives | Note 8 – Financial Derivatives The Company uses certain financial derivatives to mitigate its exposure to volatility in foreign currency exchange rates. The Company uses these derivative instruments to hedge exposures in the ordinary course of business and does not invest in derivative instruments for speculative purposes. The Company manages market and credit risks associated with its derivative instruments by establishing and monitoring limits as to the types and degree of risk that may be undertaken, and by entering into transactions with counterparties that have investment grade credit ratings. Fair values of derivative instruments are as follows:
($ in thousands) |  | Balance sheet location |  | February 29, 2020 |  |  | February 28, 2019 |  |  | August 31, 2019 |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | Other current assets |  | $ | 247 |  |  | $ | 396 |  |  | $ | 1,073 |
Foreign currency forward contracts |  | Other current liabilities |  |  | — |  |  |  | (9 | ) |  |  | — |
Total derivatives designated as hedging instruments |  |  |  | $ | 247 |  |  | $ | 387 |  |  | $ | 1,073 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | Other current assets |  | $ | — |  |  | $ | 30 |  |  | $ | 39 |
Foreign currency forward contracts |  | Other current liabilities |  |  | — |  |  |  | (13 | ) |  |  | — |
Total derivatives not designated as hedging instruments |  |  |  | $ | — |  |  | $ | 17 |  |  | $ | 39 |
Accumulated other comprehensive income included realized and unrealized after-tax gains of $7.2 million, $5.7 million, and $7.0 million at February 29, 2020, February 28, 2019, and August 31, 2019, respectively, related to derivative contracts designated as hedging instruments. Net Investment Hedging Relationships The amount of gain (loss) recognized in other comprehensive income is as follows:
|  | Three months ended |  |  | Six months ended |
($ in thousands) |  | February 29, 2020 |  |  | February 28, 2019 |  |  | February 29, 2020 |  |  | February 28, 2019 |
Foreign currency forward contracts, net of tax (benefit) expense of ($86), $25, ($60) and $186, respectively |  | $ | 277 |  |  | $ | (8 | ) |  | $ | 203 |  |  | $ | 643 |
For the three months ended February 29, 2020, the Company did not settle any foreign currency forward contracts. For the three months ended February 28, 2019, the Company settled foreign currency forward contracts resulting in an after-tax net gain of $0.2 million, which was included in other comprehensive income as part of a currency translation adjustment. For the six months ended February 29, 2020 and February 28, 2019, the Company settled foreign currency forward contracts resulting in an after-tax net gain of $0.8 million and $0.9 million, respectively, which were included in other comprehensive income as part of a currency translation adjustment. There were no amounts recorded in the condensed consolidated statements of operations related to ineffectiveness of foreign currency forward contracts related to net investment hedges for the three and six months ended February 29, 2020 and February 28, 2019. At February 29, 2020, February 28, 2019, and August 31, 2019, the Company had outstanding foreign currency forward contracts to sell a notional amount of 32.7 million Euro, on each date, at fixed prices to settle during the next fiscal quarter. Additionally, at February 28, 2019, the Company had an outstanding foreign currency forward contract to sell a notional amount of 43.0 million South African Rand at a fixed price settled during the next fiscal quarter. The Company’s foreign currency forward contracts qualify as hedges of a net investment in foreign operations. Derivatives Not Designated as Hedging Instruments The Company generally does not elect hedge accounting treatment for derivative contracts related to future settlements of foreign denominated intercompany receivables and payables. If the Company does not elect hedge accounting treatment for a derivative, the Company carries the derivative at its fair value in the condensed consolidated balance sheets and recognizes any subsequent changes in its fair value during a period through earnings in the condensed consolidated statements of operations. At February 29, 2020, the Company had no foreign currency forward contracts outstanding that are not designated as hedging instruments. At February 28, 2019 and August 31, 2019, the Company had notional value of $2.0 million, and $1.8 million, respectively, of U.S. dollar equivalent of foreign currency forward contracts outstanding that are not designated as hedging instruments.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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