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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2022
Derivative Financial Instruments [Abstract] |
Derivative Financial Instruments | NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS The Company’s primary exchange rate risk management objective is to mitigate the uncertainty of anticipated cash flows attributable to changes in foreign currency exchange rates. The Company primarily focuses on mitigating changes in cash flows resulting from sales denominated in currencies other than the U.S. dollar. The Company manages this risk primarily by using currency forward and option contracts. If the anticipated transactions are deemed probable, the resulting relationships are formally designated as cash flow hedges. The Company accounts for these contracts as cash flow hedges and tests effectiveness by determining whether changes in the expected cash flow of the derivative offset, within a range, changes in the expected cash flow of the hedged item. At March 31, 2022, the Company’s derivative contracts had remaining maturities of less than one year. The counterparties to these transactions had both long-term and short-term investment grade credit ratings. The maximum net exposure of the Company’s credit risk to the counterparties is generally limited to the aggregate unrealized loss of all contracts with that counterparty. At March 31, 2022, there was no such exposure to the counterparties. The Company’s exposure of counterparty credit risk is limited to the aggregate unrealized gain of $534 on all contracts at March 31, 2022. The Company’s derivative counterparties have strong credit ratings and as a result, the Company does not require collateral to facilitate transactions. The Company held the following contracts designated as hedging instruments as of March 31, 2022 and December 31, 2021:
| March 31, 2022
| Notional |  | Latest
| Amount |  | Maturity
Foreign exchange contracts - Canadian Dollars | $16,440 |  | February 2023
Foreign exchange contracts - Euros | € 18,713 |  | February 2023
Foreign exchange contracts - Australian Dollars | $1,863 |  | June 2022
| December 31, 2021
| Notional |  | Latest
| Amount |  | Maturity
Foreign exchange contracts - Canadian Dollars | $14,850 |  | February 2023
Foreign exchange contracts - Euros | € 20,104 |  | February 2023
For contracts that qualify as effective hedge instruments, the effective portion of gains and losses resulting from changes in fair value of the instruments are included in accumulated other comprehensive income (loss) and reclassified to sales in the period the underlying hedged transaction is recognized in earnings. Gains (losses) of $253 and $(321) were reclassified to sales during the three months ended March 31, 2022 and 2021, respectively. The following table presents the balance sheet classification and fair value of derivative instruments as of March 31, 2022 and December 31, 2021:
| Classification |  | March 31, 2022 |  | December 31, 2021
Derivative instruments in asset positions: |  |  |  |  |  |  |
Designated forward exchange contracts | Prepaid and other current assets |  | $ | 626 |  | $ | 491
Designated forward exchange contracts | Other long-term assets |  | $ | - |  | $ | 20
Derivative instruments in liability positions: |  |  |  |  |  |  |
Designated forward exchange contracts | Accrued liabilities |  | $ | 92 |  | $ | -
Designated forward exchange contracts | Other long-term liabilities |  | $ | - |  | $ | 24

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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 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 http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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