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Note 11 - Derivative financial instruments
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2013
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
11. Derivative financial instruments The Company entered into forward foreign exchange contracts to reduce its exposure to foreign exchange currency rate fluctuations related to forecasted Canadian dollar denominated payroll, rent and utility cash flows in the fiscal 2013 and fiscal 2014, and Mexican peso denominated payroll, rent and utility cash flows for fiscal 2013 and fiscal 2014. These contracts were effective as hedges from an economic perspective, but did not meet the requirements for hedge accounting under ASC 815 “Derivatives and Hedging”. Accordingly, changes in the fair value of these contracts were recognized into net earnings (loss) in the consolidated statement of operations and comprehensive income (loss). The Company does not enter into forward foreign exchange contracts for trading or speculative purposes. The following table presents a summary of the outstanding foreign currency forward contracts as at September 29, 2013:
The unrealized gain recognized in earnings for the three month period as a result of revaluing the instruments to fair value on September 29, 2013 was $139 (September 30, 2012 – $1,119), the unrealized loss for the nine month period ended September 29, 2013 was $965 and the unrealized gain for the nine month period ended September 30, 2012 was $1,126, which was included in cost of sales in the consolidated statement of operations and comprehensive income (loss). The realized gain on these contracts for the three month period ended September 29, 2013 was $19 (September 30, 2012 - $79 loss), and the realized gain for the nine month period ended September 29, 2013 was $655 (September 30, 2012 - $357), and is included as a component of cost of sales, in the consolidated statement of operations and comprehensive income (loss). Fair value was determined using the market approach with valuation based on market observables (Level 2 quantitative inputs in the hierarchy set forth under ASC 820 “Fair Value Measurements”). The following table presents the fair value of the Company’s derivative instruments located on the consolidated balance sheet as at September 29, 2013:
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