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Derivatives

3 Months Ended

Aug. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

11. DERIVATIVES

We operate on a global basis and are exposed to the risk that our financial condition, results of operations and cash flows could be adversely affected by changes in foreign currency exchange rates. To reduce the potential effects of foreign currency exchange rate movements on net earnings, we enter into derivative financial instruments in the form of foreign currency exchange forward contracts with major financial institutions.

Derivatives Not Designated as Hedging Instruments

We forecast our net exposure in various receivables and payables to fluctuations in the value of various currencies, and we enter into approximately 11 foreign currency forward contracts each month to mitigate that exposure. These contracts are recorded net at fair value on our consolidated balance sheets, classified as Level 2 in the fair value hierarchy; gains and losses from these contracts were recognized in other income in our consolidated statements of income. The notional amount of forward contracts in place was $18,221,000 and $4,424,000 as of August 31, 2022 and May 31, 2022, respectively.

(In thousands)
Fair Value of Derivatives Not Designated as Hedging Instruments		Balance Sheet Location		August 31, 2022				May 31, 2022
Foreign currency forward contracts, net		Prepaid and Other		$	421			$	(78	)

The location and amount of gains from derivatives not designated as hedging instruments in our consolidated statements of income were as follows:

(In thousands)
Derivatives Not Designated as Hedging Instruments		Location in statements of income		August 31, 2022				August 31, 2021
Foreign currency forward contracts		Other income (expense)		$	882			$	521

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- References

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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 https://asc.fasb.org/topic&trid=2229140

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 5
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008

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