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Note 10 - Derivative Financial Instruments
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 28, 2014
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
The Company entered into forward foreign exchange contracts to reduce its exposure to foreign exchange currency rate fluctuations related to forecasted Canadian dollar denominated payroll, rent and utility cash flows for the balance of fiscal 2014 and the first nine months of fiscal 2015, and Mexican peso denominated payroll, rent and utility cash flows for the balance of fiscal 2014 and the first nine months of fiscal 2015. These contracts were effective economic hedges but did not meet the requirements for hedge accounting under ASC 815 “Derivatives and Hedging”. Accordingly, changes in the fair value of these derivative contracts were recognized into net earnings (loss) in the consolidated statement of operations and comprehensive income (loss). The Company does not enter into forward foreign exchange contracts for trading or speculative purposes. The following table (Expressed in thousands of Canadian dollars and Mexican pesos) presents a summary of the outstanding foreign currency forward contracts as at September 28, 2014:
The unrealized loss recognized in earnings for the three month period as a result of revaluing the instruments to fair value on September 28, 2014 was $753 (September 29, 2013 – unrealized gain $139), and the unrealized gain for the nine month period ended September 28, 2014 was $136 (September 29, 2013 – unrealized loss $965), which was included in cost of sales in the consolidated statement of operations and comprehensive income (loss). The realized loss on these contracts for the three months period ended September 28, 2014 was $90 (September 29, 2013 – realized gain $19), and the realized loss for the nine month period ended September 28, 2014 was $863 (September 29, 2013 –realized gain $655), and is included as a component of cost of sales, in the consolidated statement of operations and comprehensive income (loss). Fair value was determined using the market approach with valuation based on market observables (Level 2 quantitative inputs in the hierarchy set forth under ASC 820 “Fair Value Measurements”). The following table presents the fair value of the Company’s derivative instruments located on the consolidated balance sheet as at September 28, 2014:
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