Pottery Barn 2014 Annual Report Download - page 72

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observable for the assets and liabilities, which include interest rates and credit risk ratings. We use mid-market
pricing as a practical expedient for fair value measurements. Key inputs for currency derivatives are the spot
rates, forward rates, interest rates and credit derivative market rates.
The counterparties associated with our foreign currency forward contracts are large credit-worthy financial
institutions, and the derivatives transacted with these entities are relatively short in duration, therefore, we do not
consider counterparty concentration and non-performance to be material risks at this time. Both we and our
counterparties are expected to perform under the contractual terms of the instruments. None of the derivative
contracts entered into are subject to credit risk-related contingent features or collateral requirements.
There were no transfers between Level 1 and Level 2 categories during fiscal 2014.
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