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FAIR VALUE MEASUREMENT | 12 Months Ended
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Dec. 31, 2015
FAIR VALUE MEASUREMENT |
FAIR VALUE MEASUREMENT | 10. FAIR VALUE MEASUREMENT The Company measures at fair value its financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability (i.e., an exit price) on the measurement date in an orderly transaction between market participants. As of December 31, 2014 and 2015, the following financial assets and liabilities were measured at fair value on a recurring basis in periods subsequent to their initial recognition using the type of inputs shown as follows:
|  | Fair Value Measurements Using |
As of December 31, 2015 |  | 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 |  |  | 1,924 |  |  | — |  |  | 1,924 |  |  | — |
Commodity hedge |  |  | 2,072 |  |  | — |  |  | 2,072 |  |  | — |
Interest rate swaption |  |  | 4,335 |  |  | — |  |  | 4,335 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Assets |  |  | 8,331 |  |  | — |  |  | 8,331 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap |  |  | 21,546 |  |  | — |  |  | 21,546 |  |  | — |
Warrants |  |  | 25,265 |  |  | — |  |  | 25,265 |  |  | — |
Foreign exchange forward contracts |  |  | 5,775 |  |  | — |  |  | 5,775 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Liabilities |  |  | 52,586 |  |  | — |  |  | 52,586 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | 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 |  |  | 9,643 |  |  | — |  |  | 9,643 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange forward contracts |  |  | 445 |  |  | — |  |  | 445 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign exchange forward contracts 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'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. Commodity hedge During the year ended December 31, 2015, the Company has entered into a fixed for floating energy commodity swap with a financial institution to hedge cash flows associated with electricity sales of the Astoria project for the period between expected COD and commencement of the long term PPA with the offtaker in January 2019. The swap contract was designated as a cash flow hedge at inception and is anticipated to be effective through its two-year term that ends on December 31, 2018. The fair value of the swap contract was $2,072, an asset position, recorded in derivative assets—non-current on the balance sheet at December 31, 2015. The effective portion of gains and losses on derivatives designated as cash flow hedges are initially deferred in other comprehensive income before being recognized in the statements of operations in the same period as the hedged transactions are reflected in earnings. Gains and losses on derivatives that are not designated or fail to qualify as effective hedges are recognized in the statements of operations as incurred. Fair value of the commodity swap is determined using pricing models developed based on the underlying commodity price of electricity and adjusted to reflect nonperformance risk of the counterparty and the Company, as necessary, which are considered Level 2 inputs. Interest rate swaption During the year ended December 31, 2015, the Company has entered into an option to purchase a fixed for floating interest rate swap, also known as a swaption, with a financial institution to hedge cash flows associated with interest payments of certain projects of Recurrent. The swaption had not been designated as a hedge for accounting purposes. The fair value of the swaption contract was $4,335, an asset position, recorded in derivative assets—current on the balance sheet at December 31, 2015 and the change in its fair value is recorded in gain (loss) on change in fair value of derivatives during the year ended December 31, 2015. The fair value of the swaption was measured based on observable market data, which are considered Level 2 inputs. Interest rate swap SSM, which the Company acquired on September 28, 2015, entered into fixed for floating interest rate swaps with a financial institution to hedge the interest rate risk resulting from fluctuations in interest rates on its project construction debts with notional amount totaling CAD186.0 million ($133.9 million), which will expire in 2029. The interest rate swaps had not been designated as a hedge for accounting purposes. The total estimated fair value of the swap contracts was $21,546, a liability position, recorded in derivative liabilities on the balance sheet at December 31, 2015, and the change in its fair value was recorded in gain (loss) on change in fair value of derivatives during the year ended December 31, 2015. The estimated fair value of interest rate swaps was measured based on observable market data, which are considered Level 2 inputs. Warrants The fair value of the warrants (see Note 26) was determined using the Binomial model, with certain inputs significant to the valuation methodology classified as Level 2 inputs. The effect of fair value of derivative instruments on the consolidated balance sheets as of December 31, 2014 and 2015 and the effect of derivative instruments on consolidated statements of operations for the years ended December 31, 2014 and 2015 are as follows:
|  | Fair Value of Derivative Assets |
|  | At December 31, 2014 |  | At December 31, 2015 |
|  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |
|  |  |  | $ |  |  |  | $ |
Foreign exchange forward contracts |  | Derivatives assets—current |  |  | 9,643 |  | Derivatives assets—current |  |  | 1,924 |
Interest rate swaption |  | — |  |  | — |  | Derivatives assets—current |  |  | 4,335 |
Commodity hedge |  | — |  |  | — |  | Derivatives assets—non-current |  |  | 2,072 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | Total |  |  | 9,643 |  | Total |  |  | 8,331 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | Fair Value of Derivative Liabilities |
|  | At December 31, 2014 |  | At December 31, 2015 |
|  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |
|  |  |  | $ |  |  |  | $ |
Foreign exchange forward contracts |  | Derivatives liabilities—current |  |  | 445 |  | Derivatives liabilities—current |  |  | 5,775 |
Warrants |  | — |  |  | — |  | Derivatives liabilities—current |  |  | 25,265 |
Interest rate swap |  | — |  |  | — |  | Derivatives liabilities—current |  |  | 4,188 |
Interest rate swap |  | — |  |  | — |  | Derivatives liabilities—non-current |  |  | 17,358 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | Total |  |  | 445 |  | Total |  |  | 52,586 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  |  | Amount of Gain (Loss) Recognized in Statements of Operations |
|  |  |  | Years Ended December 31 |
|  | Location of Gain (Loss) Recognized in Statements of Operations |
|  | 2013 |  | 2014 |  | 2015 |
|  |  |  | $ |  | $ |  | $ |
Foreign exchange forward contracts |  | Gain(Loss) on change in fair value of derivatives |  |  | 10,460 |  |  | 19,656 |  |  | (3,738 | )
Foreign exchange option contracts |  | Gain(Loss) on change in fair value of derivatives |  |  | 304 |  |  | — |  |  | — |
Change in fair value of warrants |  | Gain(Loss) on change in fair value of derivatives |  |  | — |  |  | — |  |  | (8,887 | )
Commodity hedge |  | Gain(Loss) on change in fair value of derivatives |  |  | — |  |  | — |  |  | (7 | )
Interest rate swaption |  | Gain(Loss) on change in fair value of derivatives |  |  | — |  |  | — |  |  | (107 | )
Interest rate swap |  | Gain(Loss) on change in fair value of derivatives |  |  | — |  |  | — |  |  | 543 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | Total |  |  | 10,764 |  |  | 19,656 |  |  | (12,196 | )
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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 $1.6 million and $7.0 million for the years ended December 31, 2014 and 2015 respectively. 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 related parties, accounts and short-term notes payable, amount due to related parties, and short-term borrowings approximate their fair value due to the short-term maturity of these instruments. Long-term borrowings are $134,300 and $606,577 as of December 31, 2014 and 2015 respectively, which approximate their fair value since most of the 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, 2015 was $150.0 million.

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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 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: 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 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 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: 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=49121117&loc=d3e13504-108611 Reference 6: 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=49121117&loc=d3e13433-108611 + Details
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