Note 9. Derivatives

All derivatives are recognized in the balance sheet at their estimated fair value. The Company does not enter into derivatives for speculative purposes. Changes in the value of derivatives (not designated as hedges) are recorded in earnings along with the gain or loss on the hedged asset or liability, while changes in the value of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive loss, until earnings are affected by the variability of cash flows.

The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations. In order to manage this risk, the Company utilizes foreign currency exchange contracts to reduce the exchange rate risk associated with recognized non-functional currency balances. The effects of changes in exchange rates are reflected concurrently in earnings for both the fair value of the foreign currency exchange contracts and the related non-functional currency asset or liability. These derivative gains and losses offset foreign currency gains and losses from the related revaluation of non-functional currency assets and liabilities (amounts included in "Other expense" in the Consolidated Statements of Operations). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts (cash flow hedges or non-designated hedges) was $13.3 million and $11.9 million at August 31, 2019 and 2018, respectively. The fair value of outstanding foreign currency exchange contracts was an asset of less than $0.1 million at August 31, 2019 and an asset of $0.4 million at August 31, 2018. Net foreign currency (losses) gains (included in "Other expense" in the Consolidated Statements of Operations) related to these derivative instruments are as follows (in thousands):



	Year Ended August 31,
	2019			2018		2017
Foreign Currency (losses) gains	$	(292	)	$	249	$	(3,113	)