Under Armour 2014 Annual Report Download - page 55

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amount that reflects the consideration which the entity expects to be entitled to in exchange for those goods o
r
services. This guidance is effective for annual and interim reporting periods beginning after December 1
5
, 2016
,
with early adoption not permitted. We are currently evaluating the standard to determine the impact of it
s
ado
p
tion on our consolidated financial statements
.
I
n January 201
5
, the FASB issued an Accounting Standards Update which eliminates from GAAP th
e
concept of extraordinary items and the need to separately classify, present, and disclose extraordinary events and
transactions. This guidance is effective for annual and interim reporting periods beginning after December 1
5,
201
5
, with early adoption permitted provided that the guidance is applied from the beginning of the fiscal year of
ado
p
tion. The ado
p
tion of this
p
ronouncement is not ex
p
ected to im
p
act our consolidated financial statements.
R
ecently Adopted Accounting
S
tandards
I
n July 2013, the FASB issued an Accounting Standards Update which requires that an unrecognized ta
x
benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction
to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with
certain exceptions. This guidance is effective for annual and interim reporting periods beginning afte
r
December 1
5
, 2013. The ado
p
tion of this
p
ronouncement did not have a material im
p
act on our consolidated
f
inancial statements
.
I
n February 2013, the FASB issued an Accounting Standards Update which requires companies to present
either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts
r
eclassified from each com
p
onent of accumulated other com
p
rehensive income based on its source and the
income statement line items affected by the reclassification. This guidance is effective for annual and interi
m
r
eporting periods beginning after December 1
5
, 2012. The adoption of this pronouncement did not have
a
material im
p
act on our consolidated financial statements.
I
TEM 7A. QUANTITATIVE AND QUALITATIVE DI
S
CLO
S
URE ABOUT MARKET RI
S
K
F
oreign Currency Risk
We current
ly g
enerate a ma
j
or
i
t
y
o
f
our conso
lid
ate
d
net revenues
i
nt
h
eUn
i
te
d
States, an
d
t
h
e report
i
n
g
currenc
yf
or our conso
lid
ate
dfi
nanc
i
a
l
statements
i
st
h
e U.S.
d
o
ll
ar. As our net revenues an
d
expenses
g
enerate
d
o
uts
id
eo
f
t
h
eUn
i
te
d
States
i
ncrease, our resu
l
ts o
f
operat
i
ons cou
ld b
ea
d
verse
ly i
mpacte
dby
c
h
an
g
es
i
n
f
ore
ign
currenc
y
exc
h
an
g
e rates. For examp
l
e, as we reco
g
n
i
ze
f
ore
ig
n revenues
i
n
l
oca
lf
ore
ig
n currenc
i
es an
dif
t
h
e
U
.S.
d
o
ll
ar stren
g
t
h
ens,
i
t cou
ld h
ave a ne
g
at
i
ve
i
mpact on our
f
ore
ig
n revenues upon trans
l
at
i
on o
f
t
h
ose resu
l
ts
i
nto t
h
e U.S.
d
o
ll
ar upon conso
lid
at
i
on o
f
our
fi
nanc
i
a
l
statements. In a
ddi
t
i
on, we are expose
d
to
g
a
i
ns an
d
l
osses resu
l
t
i
n
gf
rom
fl
uctuat
i
ons
i
n
f
ore
ig
n currenc
y
exc
h
an
g
e rates on transact
i
ons
g
enerate
dby
our
f
ore
ign
su
b
s
idi
ar
i
es
i
n currenc
i
es ot
h
er t
h
an t
h
e
i
r
l
oca
l
currenc
i
es. T
h
ese
g
a
i
ns an
dl
osses are pr
i
mar
ily d
r
i
ven
by
intercompan
y
transactions and inventor
y
purchases denominated in currencies other than the functional currenc
y
o
f the purchasin
g
entit
y
. These exposures are included in other expense, net on the consolidated statements of
income
.
F
rom time to time, we ma
y
elect to use forei
g
n currenc
y
forward contracts to reduce the risk from exchan
g
e
r
ate fluctuations primaril
y
on intercompan
y
transactions and pro
j
ected inventor
y
purchases for our internationa
l
subsidiaries. As we expand our international business, we anticipate expandin
g
our current hed
g
in
g
pro
g
ram to
include additional currenc
y
pairs and instruments. We do not enter into derivative financial instruments fo
r
speculative or tradin
g
purposes
.
A
s of December 31, 2014, the a
gg
re
g
ate notional value of our outstandin
g
forei
g
n currenc
y
forward
contracts was $123.3 million, which was comprised of Canadian Dollar/U.S. Dollar, Euro/U.S. Dollar, Yen/Euro
,
Mexican Peso/Euro and Pound Sterlin
g
/Euro currenc
y
pairs with contract maturities of one to eleven months
.
T
he forei
g
n currenc
y
forward contracts outstandin
g
as of December 31, 2014 have wei
g
hted avera
g
e contractual
4
5