Note H - Derivative Instruments

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE H—DERIVATIVE INSTRUMENTS

In accordance with FASB ASC No. 815 “Derivatives and Hedging,” for derivative instruments that are designated and qualify as a cash flow hedge (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Any gain or loss on a derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item is recognized in current earnings during the period of change.

As of September 30, 2020 and December 31, 2019, the Company had no outstanding option or foreign exchange forward contracts.

The fair value of derivative assets and derivative liabilities were both $0 at September 30, 2020.

The amounts recorded as income in research and development expenses, sales and marketing expenses and general and administrative expenses in the condensed consolidated statements of income for the nine months ended September 30, 2020 that resulted from the above referenced hedging transactions were $41, $4 and $7, respectively.

The amounts recorded as income in research and development expenses, sales and marketing expenses and general and administrative expenses in the condensed consolidated statements of income for the nine months ended September 30, 2019 that resulted from the above referenced hedging transactions were $83, $8 and $14, respectively.

The effect of derivative instruments in cash flow hedging transactions on income and other comprehensive income (“OCI”) for the three and nine months ended September 30, 2020 and 2019 is summarized below:

	Gains on Derivatives Recognized in OCI
	for the three months ended September 30,				for the nine months ended September 30,
	(Unaudited)
	2020		2019		2020		2019
Foreign exchange forward and option contracts	$	-	$	-	$	52	$	108

	Gains Reclassified from OCI into Income
		for the three months ended September 30				for the nine months ended September 30,
				Unaudited
	Location	2020		2019		2020		2019
Foreign exchange forward and option contracts	Operating expenses	$	-	$	-	$	52	$	105