|
Note 11. Derivative financial instruments
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jul. 01, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
11. Derivative
financial instruments
The
Company has 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 next
eight months, and Mexican peso denominated payroll, rent and
utility cash flows for the next eleven months. These
contracts were effective as hedges from an economic
perspective, but did not meet the requirements for hedge
accounting under ASC 815 “Derivatives and
Hedging”. Accordingly, changes in the fair value of
these contracts were recognized into net income in the
consolidated statement of operations and comprehensive
income. The Company does not enter into forward foreign
exchange contracts for trading or speculative
purposes.
The
following table presents a summary of the outstanding foreign
currency forward contracts as at July 1, 2012:
The
unrealized loss recognized in earnings as a result
of revaluing the instruments to fair value on July 1, 2012
was $455 for the quarter, and the unrealized gain for the six
month period ended July 1, 2012 was $7, which were included
in cost of sales in the statement of operations and
comprehensive income. The realized gain on these contracts
for the quarter was $49 and for the six month period was
$436, and is included as a component of cost of sales, in the
consolidated statement of operations and comprehensive
income. 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). The Company did not enter into any derivative financial
instruments contracts during the second quarter of
2011.
The
following table presents the fair value of the
Company’s derivative instruments located on the
consolidated balance sheet as at the following dates:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||