Note 7 - Derivative Instruments

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Cash flow hedges

Our locations in Canada and the Philippines primarily serve US-based clients. The revenues from these clients is billed and collected in US Dollars, but the expenses related to these revenues are paid in Canadian Dollars and Philippine Pesos. We enter into derivative contracts, in the form of forward contracts and range forward contracts (a transaction where both a call option is purchased and a put option is sold) to mitigate this foreign currency exchange risk. The contracts cover periods commensurate with expected exposure, generally three to twelve months.  We have elected to designate our derivatives as cash flow hedges in order to associate the results of the hedges with forecasted expenses.

The Company has terminated all cash flow hedges contracts early in April, 2020 due to a change in counterparty relationship, hence balance as on September 30, 2020 is nil.

The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of September 30, 2020:

	For the Three Months Ended September 30, 2020		For the Three Months Ended September 30, 2020		Year Ended December 31,2019		Year Ended December 31,2019
	Local Currency Notional Amount		U.S. Dollar Notional Amount		Local Currency Notional Amount		U.S. Dollar Notional Amount
Philippine Peso		-		-		769,000		14,361
Canadian Dollar		-		-		1,400		1,047
			$	-			$	15,408

Derivative assets and liabilities associated with our hedging activities are measured at gross fair value as described in Note 8, "Fair Value Measurements," and are included in prepaid expense and other current assets and other current liabilities in our condensed consolidated balance sheets, respectively.

	Gain (Loss) Recognized in AOCI, net of tax			Gain (Loss) Recognized in AOCI, net of tax		Gain/ (Loss) Reclassified from AOCI into Income			Gain/ (Loss) Reclassified from AOCI into Income
	Nine Months Ended September 30, 2020			Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2020			Nine Months Ended September 30, 2019
Cash flow hedges:
Foreign exchange contracts		(434	)		271		(143	)		(221	)

Non-designated hedges

We have also entered into foreign currency range forward contracts and interest swap contract as required by our lenders. These hedges are not designated hedges under ASC 815, Derivatives and Hedging. These contracts generally do not exceed 3 years in duration.

Unrealized gains and losses and changes in fair value of these derivatives are recognized as incurred in Exchange gains (losses), net in the Consolidated Statement of Income (Loss). The following table presents these amounts for the three and nine months ended September 30, 2020 and 2019:

Derivatives not designated under ASC 815	For the Three Months Ended September 30, 2020			For the Three Months Ended September 30, 2019			For the Nine Months Ended September 30, 2020			For the Nine Months Ended September 30, 2019
Foreign currency forward contracts	$	(578	)	$	393		$	(110	)	$	536
Interest rate swap	$	(2	)	$	(6	)	$	(424	)	$	(636	)