Derivative Instruments and Hedging Activities

3 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

As part of our financial risk management program, we use certain derivative financial instruments. We do not enter into derivative transactions for speculative purposes and, therefore, we do not hold any derivative instruments for trading purposes. We account for derivative instruments as a hedge of the related asset, liability, firm commitment or anticipated transaction, when the derivative is specifically designated and qualifies as a hedge of such items. Our objective in managing foreign exchange exposures with derivative instruments is to reduce volatility in cash flow. We measure hedge effectiveness by assessing the changes in the fair value or expected future cash flows of the hedged item.

There were no derivatives designated as hedging instruments as of September 30, 2023 and June 30, 2023. The fair value of derivatives not designated as hedging instruments in the condensed consolidated balance sheets are as follows:


(in thousands)	September 30, 2023		June 30, 2023






Derivatives not designated as hedging instruments
Other current assets - currency forward contracts	$	1	$	68
Other current liabilities - currency forward contracts	(90)		(100)
Total derivatives not designated as hedging instruments	(89)		(32)
Total derivatives	$	(89)	$	(32)

Certain currency forward contracts that hedge significant cross-border intercompany loans are considered as other derivatives and therefore do not qualify for hedge accounting. These contracts are recorded at fair value in the condensed consolidated balance sheets, with the offset to other expense, net. Losses (gains) related to derivatives not designated as hedging instruments have been recognized as follows:


	Three Months Ended September 30,
(in thousands)	2023		2022
Other expense (income), net - currency forward contracts	$	122	$	(306)

NET INVESTMENT HEDGES

As of September 30, 2023 and June 30, 2023, there were no foreign currency-denominated intercompany loans payable outstanding that were designated as net investment hedges. A gain of $1.7 million was recorded as a component of foreign currency translation adjustments in other comprehensive loss for the three months ended September 30, 2022.