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DERIVATIVE INSTRUMENTS
 6 Months Ended
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS

NOTE 5: DERIVATIVE INSTRUMENTS

 

The Company enters into foreign currency forward and option contracts with financial institutions to protect against the exposure to changes in exchange rates of several foreign currencies that are associated with forecasted cash flows and existing assets and liabilities. The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.

 

The fair value of derivative contracts in the interim consolidated balance sheets at June 30, 2022 and December 31, 2021 were as follows:

 

   
Other
accounts
receivable
and prepaid
expenses
    
Other
accounts
payable and
accrued
expenses
  
   
December 31, 2021
  
Derivatives designated as hedging instruments
            
Currency forward contracts
  
$
743
    
$
12
  
Derivatives not designated as hedging instruments
                
Currency forward and option contracts
  
$
109
    
$
301
  
                 
Total derivatives
  
$
852
    
$
313
  
 
   
Other
accounts
receivable
and prepaid
expenses
    
Other
accounts
payable and
accrued
expenses
  
   
June 30, 2022
  
   
Unaudited
  
Derivatives designated as hedging instruments
            
Currency forward contracts
  
$
-
    
$
2,631
  
Derivatives not designated as hedging instruments
                
Currency forward and option contracts
  
$
216
    
$
139
  
                 
Total derivatives
  
$
216
    
$
2,770
  

 

The notional amounts of outstanding derivative contracts in U.S. dollars at December 31, 2021 and June 30, 2022 were as follows:

 

   
December 31,
2021
    
June 30,
2022
  
         
Unaudited
  
Derivatives designated as hedging instruments
            
Currency forward contracts
  
$
41,832
    
$
28,799
  
Derivatives not designated as hedging instruments
                
Currency forward and option contracts
  
$
34,304
    
$
35,196
  
                 
Total derivatives
  
$
76,136
    
$
63,995
  

 

The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is up to 12 months.

 

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains or losses from contracts that were not designated as hedging instruments are recognized in "financial expenses and others, net".

 

The effect of derivative contracts on the interim consolidated statements of operations for the six months ended June 30, 2021 and 2022 was as follows:

 

   

Six months ended June 30,

  
   

2021

    

2022

  
   

Unaudited

  

 

      

 

    

Operating income (expenses)

  

$

1,000

 

  

$

(293

 )

Financial income (expenses)

  

$

37

    

$

(617

 )