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FINANCIAL INSTRUMENTS | 12 Months Ended
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Dec. 31, 2019
Fair Value Disclosures [Abstract] |
FINANCIAL INSTRUMENTS |
27. | FINANCIAL INSTRUMENTS
Interest rate swap agreements In February 2013, Frontline 2012 entered into six interest rate swaps with Nordea Bank whereby the floating interest rate on an original principal amount of $260 million of the then anticipated debt on 12 MR product tanker newbuildings was switched to fixed rate. Six of these newbuildings were subsequently financed from the $466.5 million term loan facility. In February 2016, the Company entered into an interest rate swap with DNB whereby the floating interest on notional debt of $150.0 million was switched to fixed rate. The contract had a forward start date of February 2019. The aggregate fair value of these swaps at December 31, 2019 was an asset of $0.1 million (2018: $7.6 million) and a liability of $4.3 million (2018: nil). The fair value (level 2) of the Company’s interest rate swap agreements is the estimated amount that the Company would receive or pay to terminate the agreements at the reporting date, taking into account, as applicable, fixed interest rates on interest rate swaps, current interest rates, forward rate curves and the current credit worthiness of both the Company and the derivative counterparty. The estimated fair value is the present value of future cash flows. The Company recorded a loss on these interest rate swaps of $10.1 million in 2019 (2018: gain of $4.3 million, 2017: loss of $0.8 million). The interest rate swaps are not designated as hedges and are summarized as at December 31, 2019 as follows:
Notional Amount |  | Inception Date | Maturity Date | Fixed Interest Rate |
($000s) |  |  |  |
12,892 |  | June 2013 | June 2020 | 1.4025 | %
38,546 |  | September 2013 | September 2020 | 1.5035 | %
65,645 |  | December 2013 | December 2020 | 1.6015 | %
12,690 |  | March 2014 | March 2021 | 1.6998 | %
13,033 |  | June 2014 | June 2021 | 1.7995 | %
13,376 |  | September 2014 | September 2021 | 1.9070 | %
150,000 |  | February 2016 | February 2026 | 2.1970 | %
306,182 |  |  |  |
Foreign currency risk The majority of the Company's transactions, assets and liabilities are denominated in U.S. dollars, the functional currency of the Company. There is a risk that currency fluctuations will have a negative effect on the value of the Company's cash flows. The Company has not entered into forward contracts for either transaction or translation risk, which may have an adverse effect on the Company's financial condition and results of operations. Certain of the Company's subsidiaries report in Sterling, Singapore dollars and Norwegian kroner and risks of two kinds arise as a result:
• | a transaction risk, that is, the risk that currency fluctuations will have a negative effect on the value of the Company's cash flows;
• | a translation risk, that is, the impact of adverse currency fluctuations in the translation of foreign operations and foreign assets and liabilities into U.S. dollars for the Company's consolidated financial statements.
Accordingly, such risk may have an adverse effect on the Company's financial condition and results of operations. The Company has not entered into material derivative contracts for either transaction or translation risk. Fair Values The carrying value and estimated fair value of the Company's financial instruments as of December 31, 2019 and 2018 are as follows:
| 2019 |  | 2018
(in thousands of $) | Carrying Value |  |  | Fair Value |  |  | Carrying Value |  |  | Fair Value |
Assets: |  |  |  |  |  |  |
Cash and cash equivalents | 174,223 |  |  | 174,223 |  |  | 66,484 |  |  | 66,484 |
Restricted cash | 3,153 |  |  | 3,153 |  |  | 1,420 |  |  | 1,420 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Floating rate debt | 1,553,928 |  |  | 1,553,928 |  |  | 1,525,028 |  |  | 1,525,028 |
Fixed rate debt | 147,413 |  |  | 146,225 |  |  | 215,524 |  |  | 212,696 |
The estimated fair value of financial assets and liabilities are as follows:
(in thousands of $) | 2019 Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |
Cash and cash equivalents | 174,223 |  |  | 174,223 |  |  | — |  |  | — |
Restricted cash | 3,153 |  |  | 3,153 |  |  | — |  |  | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Floating rate debt | 1,553,928 |  |  | — |  |  | 1,553,928 |  |  | — |
Fixed rate debt | 146,225 |  |  | — |  |  | 7,329 |  |  | 138,896 |
(in thousands of $) | 2018 Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |
Cash and cash equivalents | 66,484 |  |  | 66,484 |  |  | — |  |  | — |
Restricted cash | 1,420 |  |  | 1,420 |  |  | — |  |  | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Floating rate debt | 1,525,028 |  |  | — |  |  | 1,525,028 |  |  | — |
Fixed rate debt | 212,696 |  |  | — |  |  | 7,631 |  |  | 205,065 |
The following methods and assumptions were used to estimate the fair value of each class of financial instrument; Cash and cash equivalents – the carrying values in the balance sheet approximate fair value. Restricted cash – the carrying values in the balance sheet approximate fair value. Floating rate debt - the fair value of floating rate debt has been determined using level 2 inputs and is considered to be equal to the carrying value since it bears variable interest rates, which are reset on a quarterly basis. Fixed rate debt - short-term debt held with a third party bank has been valued using level 2 inputs, the remaining fixed rate debt has been determined using level 3 inputs being the discounted expected cash flows of the outstanding debt. Assets Measured at Fair Value on a Nonrecurring Basis Nonrecurring fair value measurements include a goodwill impairment assessment completed during the year. The impairment test used Level 1, Level 2 and Level 3 inputs. See Note 4. Assets Measured at Fair Value on a Recurring Basis Marketable securities are listed equity securities considered to be available-for-sale securities for which the fair value as at the balance sheet date is the aggregate market value based on quoted market prices (level 1). The fair value (level 2) of interest rate agreements is the present value of the estimated future cash flows that the Company would receive or pay to terminate the agreements at the balance sheet date, taking into account, as applicable, fixed interest rates on interest rate swaps, current interest rates, forward rate curves and the credit worthiness of both the Company and the derivative counterparty. Concentrations of risk There is a concentration of credit risk with respect to cash and cash equivalents to the extent that substantially all of the amounts are carried with Skandinaviska Enskilda Banken, or SEB, HSBC, Royal Bank of Scotland, DNB Bank ASA and Nordea Bank Norge, or Nordea. There is a concentration of credit risk with respect to restricted cash to the extent that substantially all of the amounts are carried with DNB Bank ASA. However, the Company believes this risk is remote.

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- References No definition available. + Details
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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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