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Derivative Instruments
 6 Months Ended
Feb. 28, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments DERIVATIVE INSTRUMENTS
Cash Flow Hedges 
Foreign Currency Forward Contracts
FactSet conducts business outside the U.S. in several currencies including the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso. As such, the Company is exposed to movements in foreign currency exchange rates compared with the U.S. dollar. The Company utilizes derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations and reduce the volatility of earnings and cash flows associated with changes in foreign currency. The Company does not enter into foreign currency forward contracts for trading or speculative purposes and limits counterparties to credit-worthy financial institutions. Refer to Note 12, Commitments and Contingencies – Concentrations of Credit Risk, for further discussion on counterparty credit risk. 
In designing a specific hedging approach, FactSet considered several factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge. The gains and losses on foreign currency forward contracts offset the variability in operating expenses associated with currency movements. The changes in fair value for these foreign currency forward contracts are initially reported as a component of Accumulated other comprehensive loss ("AOCL") and subsequently reclassified into Operating expenses when the hedge is settled. There was no discontinuance of cash flow hedges during the six months ended February 28, 2021 or February 29, 2020, and as such, no corresponding gains or losses related to changes in the value of the Company’s contracts were reclassified into earnings prior to settlement. 
As of February 28, 2021, FactSet maintained foreign currency forward contracts to hedge a portion of its British Pound Sterling, Euro, Indian Rupee and Philippine Peso exposures. FactSet entered into a series of forward contracts to mitigate its currency exposure ranging from 25% to 75% over their respective hedged periods. The current foreign currency forward contracts are set to mature at various points between the third quarter of fiscal 2021 through the second quarter of fiscal 2022.
As of February 28, 2021, the gross notional value of foreign currency forward contracts to purchase Philippine Pesos and Indian Rupees with U.S. dollars was ₱1.5 billion and Rs2.6 billion, respectively. The gross notional value of foreign currency forward contracts to purchase U.S. dollars with Euros and British Pound Sterling was €39.1 million and £40.4 million, respectively.
Interest Rate Swap Agreement
On March 5, 2020, FactSet entered into an interest rate swap agreement with a notional amount of $287.5 million to hedge the variable interest rate obligation on a portion of its outstanding debt under its 2019 Revolving Credit Facility (as defined below in Note 11, Debt). As of February 28, 2021, FactSet has borrowed $575.0 million of the available $750.0 million under the 2019 Revolving Credit Facility, which bears interest on the outstanding principal amount at a rate equal to contractual one month LIBOR plus a spread using a debt leverage pricing grid, which was 0.875% as of February 28, 2021. Refer to Note 11, Debt, for further discussion on the 2019 Revolving Credit Facility. The variable interest rate on FactSet’s long-term debt can expose the Company to interest rate volatility arising from changes in LIBOR. Under the terms of the interest rate swap agreement, FactSet will pay interest at a fixed rate of 0.7995% and receive variable interest payments based on the same one-month LIBOR utilized to calculate the interest expense from the 2019 Revolving Credit Facility. The interest rate swap agreement matures on March 29, 2024.
As the terms for the interest rate swap agreement align with the 2019 Revolving Credit Facility, the Company does not expect any hedge ineffectiveness. The Company has designated and accounted for this instrument as a cash flow hedge with the unrealized gains or losses on the interest rate swap agreement recorded in AOCL in the Consolidated Balance Sheets. Realized gains or losses are subsequently reclassified into Other expenses in the Consolidated Statement of Income when settled.
The following is a summary of the gross notional values of the derivative instruments: 

(in thousands, in U.S. dollars)
Gross Notional Value
February 28, 2021August 31, 2020
Foreign currency forward contracts$164,373 $129,649 
Interest rate swap agreement287,500 287,500 
Total cash flow hedges$451,873 $417,149 

Fair Value of Derivative Instruments
The following is a summary of the fair values of the derivative instruments:
Fair Value of Derivative Instruments
Derivatives designated as hedging instrumentsDerivative AssetsDerivative Liabilities
Balance Sheet ClassificationFebruary 28, 2021August 31, 2020Balance Sheet ClassificationFebruary 28, 2021August 31, 2020
Foreign currency forward contractsPrepaid expenses and other current assets$3,169 $3,644 Accounts payable and accrued expenses$378 $93 
Interest rate swap agreementPrepaid expenses and other current assets— — Accounts payable and accrued expenses1,889 1,861 
Other Assets— — Other non-current liabilities1,444 3,819 
Total cash flow hedges$3,169 $3,644 $3,711 $5,773 

All derivatives were designated as hedging instruments as of February 28, 2021 and August 31, 2020.
Derivatives in Cash Flow Hedging Relationships
The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended February 28, 2021 and February 29, 2020, respectively:

(in thousands)Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into IncomeGain (Loss) Reclassified from AOCL into Income
February 28,February 29,February 28,February 29,
Derivatives in Cash Flow Hedging Relationships2021202020212020
Foreign currency forward contracts$1,879 $(630)SG&A$2,069 $(349)
Interest rate swap agreement1,462 — Interest expense, net(472)— 
Total cash flow hedges$3,341 $(630)$1,597 $(349)
The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the six months ended February 28, 2021 and February 29, 2020, respectively:
(in thousands)Gain Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into IncomeGain (Loss) Reclassified from AOCL into Income
February 28,February 29,February 28,February 29,
Derivatives in Cash Flow Hedging Relationships2021202020212020
Foreign currency forward contracts$2,127 $1,402 SG&A$2,886 $(1,082)
Interest rate swap agreement1,406 — Interest expense, net(942)— 
Total cash flow hedges$3,533 $1,402 $1,944 $(1,082)
As of February 28, 2021, the Company estimates that net pre-tax derivative gains of $0.9 million included in AOCL will be reclassified into earnings within the next 12 months. As of February 28, 2021, FactSet's cash flow hedges were effective, with no amount of ineffectiveness recorded in the Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
Offsetting of Derivative Instruments
FactSet’s master netting and other similar arrangements with its respective counterparties allow for net settlement under certain conditions. As of February 28, 2021, and August 31, 2020, there were no material amounts recorded net on the Consolidated Balance Sheets.