Abercrombie & Fitch 2011 Annual Report Download - page 95

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ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company also uses foreign exchange forward contracts to hedge certain foreign currency
denominated net monetary assets/liabilities. Examples of monetary assets/liabilities include cash balances,
receivables and payables. Fluctuations in exchange rates result in transaction gains/(losses) being recorded
in earnings as U.S. GAAP requires that monetary assets/liabilities be remeasured at the spot exchange rate
at quarter-end or upon settlement. The Company has chosen not to apply hedge accounting to these
instruments because there are no differences in the timing of gain or loss recognition on the hedging
instrument and the hedged item.
As of January 28, 2012, the Company had the following outstanding currency forward contracts that
were entered into to hedge foreign currency denominated net monetary assets/liabilities:
Notional Amount(1)
Japanese Yen ................................................... $19,559
Euro .......................................................... $11,556
British Pound ................................................... $ 7,669
Canadian Dollar ................................................. $ 3,435
(1) Amounts are reported in thousands and in U.S. Dollars equivalent as of January 28, 2012.
The location and amounts of derivative fair values on the Consolidated Balance Sheets as of
January 28, 2012 and January 29, 2011 were as follows:
Asset Derivatives Liability Derivatives
Balance Sheet
Location
January 28,
2012
January 29,
2011
Balance
Sheet
Location
January 28,
2012
January 29,
2011
(in thousands)
Derivatives Designated as
Hedging Instruments:
Foreign Exchange Forward
Contracts ...................
Other
Current Assets $10,766 $727
Other
Liabilities $ 874 $ 763
Derivates Not Designated as
Hedging Instruments:
Foreign Exchange Forward
Contracts ...................
Other
Current Assets $ 4 $ —
Other
Liabilities $ 584 $ 380
Total ........................ Other
Current Assets $10,770 $727
Other
Liabilities $1,458 $1,143
Refer to Note 7, “Fair Value,” for further discussion of the determination of the fair value of
derivatives.
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