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Note 5 - Derivative Instruments and Hedging Activities | 3 Months Ended
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Mar. 31, 2018
Notes to Financial Statements |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 5. Derivative instruments and hedging activities: Foreign currency forward contracts In October 2012, the Company entered into a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on its future cash flows related to a portion of payroll, rent, and payments to Canadian domain name registry suppliers that are denominated in Canadian dollars and are expected to be paid by its Canadian operating subsidiary. As part of its risk management strategy, the Company uses derivative instruments to hedge a portion of the foreign exchange risk associated with these costs. The Company does not use these forward contracts for trading or speculative purposes. These forward contracts typically mature between one and eighteen months. The Company has designated certain of these transactions as cash flow hedges of forecasted transactions under Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging . For certain contracts, as the critical terms of the hedging instrument and the entire hedged forecasted transaction are the same in accordance with ASC Topic 815, the Company has been able to conclude that changes in fair value and cash flows attributable to the risk of being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, unrealized gains or losses on the effective portion of these contracts have been included within other comprehensive income. The fair value of the contracts, as of March 31, 2018, is recorded as derivative instrument assets. For certain contracts where the hedged transactions are no longer probable to occur, the loss on the associated forward contract is reclassified from AOCI to earnings. As of March 31, 2018, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $12.8 million, of which $11.3 million were designated as hedges as compared to the period as of December 31, 2017 when the Company held nil contracts to trade U.S. dollars in exchange for Canadian dollars. As of March 31, 2018, we had the following outstanding forward exchange contracts to trade U.S. dollars in exchange for Canadian dollars:
Maturity date |  | Notional amount of U.S. dollars |  |  | Weighted average exchange rate of U.S. dollars |  |  | Fair value |
April - June 2018 |  |  | 3,176,805 |  |  |  | 1.2919 |  |  |  | 7,737 |
July - September 2018 |  |  | 3,394,161 |  |  |  | 1.2893 |  |  |  | 7,165 |
October - December 2018 |  |  | 1,604,112 |  |  |  | 1.2873 |  |  |  | 3,421 |
January - March 2019 |  |  | 1,639,448 |  |  |  | 1.2852 |  |  |  | 3,192 |
April - June 2019 |  |  | 1,599,200 |  |  |  | 1.2831 |  |  |  | 2,788 |
July - September 2019 |  |  | 1,366,226 |  |  |  | 1.2809 |  |  |  | 1,800 |
|  | $ | 12,779,952 |  |  |  | 1.2875 |  |  | $ | 26,103 |
Fair value of derivative instruments and effect of derivative instruments on financial performance The effect of these derivative instruments on our consolidated financial statements were as follows (amounts presented do not include any income tax effects). Fair value of derivative instruments in the consolidated balance sheets
|  |  |  | As of March 31, 2018 |  |  | As of December 31, 201 7 |
Derivatives |  | Balance Sheet Location |  | Fair Value Asset (Liability) |  |  | Fair Value Asset (Liability) |
Foreign currency forward contracts designated as cash flow hedges (net) |  | Derivative instruments |  | $ | 23,010 |  |  | $ | - |
Foreign currency forward contracts not designated as cash flow hedges (net) |  | Derivative instruments |  | $ | 3,093 |  |  | $ | - |
Total foreign currency forward contracts (net) |  | Derivative instruments |  | $ | 26,103 |  |  | $ | - |
Movement in Accumulated Other Comprehensive Income ("AOCI") balance for the three months ended March 31, 2018 :
|  | Gains and losses on cash flow hedges |  |  | Tax impact |  |  | Total AOCI |
Opening AOCI balance – December 31, 2017 |  | $ | - |  |  | $ |  | - |  | $ | - |
Other comprehensive income (loss) before reclassifications |  |  | 23,010 |  |  |  | (5,585 | ) |  |  | 17,425 |
Amount reclassified from accumulated other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |
Other comprehensive income (loss) for the three months ended March 31, 2018 |  |  | 23,010 |  |  |  | (5,585 | ) |  |  | 17,425 |
Ending AOCI balance – March 31, 2018 |  | $ | 23,010 |  |  | $ | (5,585 | ) |  | $ | 17,425 |
Effects of derivative instruments on income and other comprehensive income (OCI) for the three months ended March 31, 2018 and March 31, 2017 are as follows:
Derivatives in Cash Flow Hedging Relationship |  | Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative (Effective Portion) |  | Location of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) |  | Amount of Gain or (Loss) Reclassified from AOCI into Income, (Effective Portion) |  | Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing) |  | Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing) |
|  |  |  |  | Operating expenses |  | $ | - |  | Operating expenses |  | $ | — |
Foreign currency forward contracts for the three months ended March 31, 2018 |  | $ | - |  | Cost of revenues |  | $ | - |  | Cost of revenues |  |  | — |
|  |  |  |  | Operating expenses |  | $ | 105,355 |  | Operating expenses |  | $ | — |
Foreign currency forward contracts for the three months ended March 31, 2017 |  | $ | 105,609 |  | Cost of revenues |  | $ | 21,128 |  | Cost of revenues |  |  | — |
In addition to the above, for those foreign currency forward contracts not designated as hedges, the Company recorded a gain of $3,093 for the change in fair value of outstanding contracts for the three months ended March 31, 2018, in the consolidated statement of operations and comprehensive income. The Company has recorded a total gain of $34,425 for the change in fair value of outstanding contracts and the settlement of contracts not designated as hedges for the three months ended March 31, 2017, in the consolidated statement of operations and comprehensive income.

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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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