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FAIR VALUE MEASUREMENT | 12 Months Ended
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Dec. 31, 2014
FAIR VALUE MEASUREMENT |
FAIR VALUE MEASUREMENT | 9. FAIR VALUE MEASUREMENT As of December 31, 2013 and 2014, information about inputs into the fair value measurements of the Company's assets or liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows:
|  | Fair Value Measurements Using |
As of December 31, 2014 |  | Total Fair Value and Carrying Value on the Balance Sheets |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |
|  | $ |  | $ |  | $ |  | $ |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange forward contracts |  |  | 9,642,728 |  |  | — |  |  | 9,642,728 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange forward contracts |  |  | 445,222 |  |  | — |  |  | 445,222 |  |  | — |
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|  | Fair Value Measurements Using |
As of December 31, 2013 |  | Total Fair Value and Carrying Value on the Balance Sheets |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |
|  | $ |  | $ |  | $ |  | $ |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange forward contracts |  |  | 7,323,422 |  |  | — |  |  | 7,323,422 |  |  | — |
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Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange forward contracts |  |  | 597,089 |  |  | — |  |  | 597,089 |  |  | — |
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The Company's foreign currency derivative instruments relate to foreign exchange option or forward contracts involving major currencies such as Japanese yen, Euro, Canadian dollar and Renminbi. Since its derivative instruments are not traded on an exchange, the Company values them using valuation models. Interest rate yield curves and foreign exchange rates are the significant inputs into these valuation models. These inputs are observable in active markets over the terms of the instruments the Company holds, and accordingly, the fair value measurements are classified as Level 2 in the hierarchy. The Company considers the effect of its own credit standing and that of its counterparties in valuations of its derivative financial instruments. The Company measures certain long-lived assets or long-term investments at fair value on a non-recurring basis in periods after initial measurement in circumstances when the fair value of such assets is below its recorded cost and impairment is required. In accordance with ASC 360, the Company's mono-crystalline ingot furnaces with a carrying value of $5.8 million was written down to its fair value $2.1 million, resulting an impairment charge of $3.7 million included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2013. The Company recorded impairment charges for certain idle assets of $1,567,954 for the years ended December 31, 2014. The fair value of the assets or investment was measured based on prices offered by unrelated third-party willing buyers and classified as level 3 fair value measurements as the offering prices are not observable. The Company also holds financial instruments that are not recorded at fair value in the consolidated balance sheets, but whose fair value is required to be disclosed under U.S. GAAP. The carrying value of cash and cash equivalents, restricted cash, trade receivables, billed and unbilled, amount due from a related party, accounts and short-term notes payable, due to related parties, and short-term borrowings approximate their fair value due to the short-term maturity of these instruments. Long-term borrowings of $151,391,572 and $134,299,521 as of December 31, 2013 and 2014 respectively, which approximate their fair value since these borrowings contain variable interest rates. The fair value of long-term borrowings was measured based on discounted cash flow approach, which is classified as level 2 as the key input can be corroborated with market data. The carrying value of the Company's outstanding convertible notes as of December 31, 2014 was $150.0 million. Depending on the terms of the specific derivative instruments and market conditions, some of the Company's derivative instruments may be assets and others liabilities at any particular point in time. The Company's primary objective for holding derivative financial instruments is to manage currency risk. The recognition of gains or losses resulting from changes in fair value of those derivative instruments is based on the use of each derivative instrument and whether it qualifies for hedge accounting. The Company entered into certain foreign currency derivative contracts to protect against volatility of future cash flows caused by the changes in foreign exchange rates. The foreign currency derivative contracts do not qualify for hedge accounting and, as a result, the changes in fair value of the foreign currency derivative contracts are recognized in the consolidated statements of operations. The Company recorded a gain (loss) on foreign currency derivative contracts of $(4,369,173), $10,764,226 and $19,656,236 for the years ended December 31, 2012, 2013 and 2014, respectively. The effect of fair value of derivative instruments on the consolidated balance sheets as of December 31, 2013 and 2014 and the effect of derivative instruments on consolidated statements of operations for the years ended December 31, 2013 and 2014 are as follows:
|  | Fair Value of Derivatives Asset |
|  | At December 31, 2013 |  | At December 31, 2014 |
|  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |
|  |  |  | $ |  |  |  | $ |
Foreign exchange forward contracts |  | Foreign currency derivative assets |  |  | 7,323,422 |  | Foreign currency derivative assets |  |  | 9,642,728 |
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|  | Fair Value of Derivatives Liability |
|  | At December 31, 2013 |  | At December 31, 2014 |
|  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |
|  |  |  | $ |  |  |  | $ |
Foreign exchange forward contracts |  | Foreign currency derivative liabilities |  |  | 597,089 |  | Foreign currency derivative liabilities |  |  | 445,222 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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|  |  |  | Amount of Gain (Loss) Recognized in Income on Derivatives |
|  |  |  | Years Ended December 31 |
|  | Location of Gain (Loss) Recognized in Income on Derivatives |
|  | 2012 |  | 2013 |  | 2014 |
|  |  |  | $ |  | $ |  | $ |
Foreign exchange option contracts |  | Gain(Loss) on change in foreign currency derivatives |  |  | 428,340 |  |  | 304,582 |  |  | — |
Foreign exchange forward contracts |  | Gain(Loss) on change in foreign currency derivatives |  |  | (4,797,513 | ) |  | 10,459,644 |  |  | 19,656,236 |
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Total |  |  |  |  | (4,369,173 | ) |  | 10,764,226 |  |  | 19,656,236 |
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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13504-108611 + Details
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