Forward Exchange Contracts. Establishment Fee is a flat fee which applies for each new contract written under AUD $25,000 equivalent. Extension Fee is a flat fee for each extension of maturity date. Delivery Fee is a flat fee and applies for the sixth and subsequent deliveries under a single contract. The first five deliveries under a single contract are free. Cancellation Fee is a flat fee charged on the cancellation of a contract.
Forward Exchange Contracts. 2.1 Unless otherwise agreed between us any forward exchange contract you enter into with us will be for commercial purposes and, if we ask you to do so, you will transfer to us funds, and/or provide approved securities to meet the margin we think we need to cover exchange rate fluctuations.
Forward Exchange Contracts. (1) Any premium or discount arising at the inception of a forward exchange contract shall be amortised as expense or income over the life of the contract. Exchange differences on such a contract shall be recognised as income or as expense in the previous year in which the exchange rates change. Any profit or loss arising on cancellation or renewal shall be recognised as income or as expense for the previous year.
(2) The provisions of sub-para (1) shall apply provided that the contract:
(a) is not intended for trading or speculation purposes; and
(b) is entered into to establish the amount of the reporting currency required or available at the settlement date of the transaction.
(3) The provisions of sub-para (1) shall not apply to the contract that is entered into to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction. For this purpose, firm commitment, shall not include assets and liabilities existing at the end of the previous year.
(4) The premium or discount that arises on the contract is measured by the difference between the exchange rate at the date of the inception of the contract and the forward rate specified in the contract. Exchange difference on the contract is the difference between:
(a) the foreign currency amount of the contract translated at the exchange rate at the last day of the previous year, or the settlement date where the transaction is settled during the previous year; and
(b) the same foreign currency amount translated at the date of inception of the contract or the last day of the immediately preceding previous year, whichever is later.
(5) Premium, discount or exchange difference on contracts that are intended for trading or speculation purposes, or that are entered into to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction shall be recognised at the time of settlement.
Forward Exchange Contracts. AND INTEREST RATE SWAPS 7.1 Forward Exchange Contracts................................................23 7.2 Interest Rate Swaps.......................................................23
Forward Exchange Contracts. Subject to the terms of this Agreement, the Borrower shall be entitled, upon execution of the usual forms, to avail itself of the Swing Line Credit to purchase Forward Exchange Contracts. In such event the Borrower shall be deemed to have utilized the Swing Line Credit to the extent of such percentage, as is reasonably determined by the Lender, of the face amount of any such Forward Exchange Contract. The Borrower shall deliver to the Lender a demand promissory note (bearing the same rate of interest as a Prime Rate Loan) for any amount owing by the Borrower in respect of a Forward Exchange Contract which is not paid when the same becomes due and payable.
Forward Exchange Contracts. 9.1 Forward Contract — The Customer may buy or sell currency for the purpose of hedging the risk of movement in the value of a currency (for commercial and not for speculation or investment purposes) by placing an Order with Custom House specifying the currency, amount of currency, and the Value Date (the “Forward Contract”). At the option of the Customer the delivery of the currency pursuant to the Forward Contract may be either: (a) processed on the Value Date (the “Fixed Term Forward Contract”), or (b) processed in multiple draw downs at any time between the Acceptance of the Forward Contract and the Value Date (the “Optional Delivery Date Forward Contract”).
9.2 Pre-delivery of Fixed Term Forward Contract — At the request of the Customer, Custom House may, at its sole discretion, deliver the currency pursuant to the Fixed Term Forward Contract prior to the Value Date (the “Fixed Term Pre-delivery Date”). For any such pre-delivery, an adjusted rate of exchange calculated on the Fixed Term Pre-delivery Date may be applied at the sole discretion of Custom House.
Forward Exchange Contracts. 11.1 With our prior agreement, we may allow you to purchase, and we may purchase from you, foreign currency at such exchange rate and on such terms as we may agree for delivery on a specified future maturity date or dates or during a specified period, for a specified future payment need (a “Forward Exchange Contract”). We may require you to provide one or more advance payments or other collateral or security in a specified amount in respect of any Forward Exchange Contract.
11.2 American Express may from time to time establish minimum and maximum transaction sizes and drawdown amounts for Forward Exchange Contracts.
11.3 You agree that you will use Forward Exchange Contracts in connection with your lawful future payment needs and shall not use Forward Exchange Contracts other than by way of a direct investment or to facilitate a means of payment for identifiable goods and services. You acknowledge that we are unable to enter into a Forward Exchange Contract with you unless you are using that Forward Exchange Contract by way of a direct investment or to facilitate a means of payment for identifiable goods and services.
11.4 We shall be entitled to close-out, reverse or terminate a Forward Exchange Contract by any reasonable method and without prior notice if:
Forward Exchange Contracts. In some instances, a foreign exchange forward contract is used to minimize the forward exchange risk. A forward exchange contract obligates the Company to exchange predetermined amounts of specified foreign currencies at specified foreign exchange rates on specified dates. On July 27, 2001, the Company entered into 12 forward contracts to purchase 3.5 million Australian dollars each month end through July 31, 2002. A pre-tax gain of $0.4 million related to the forward contracts (a $0.3 million realized gain and a $0.1 million unrealized gain) was recorded in the Consolidated Statement of Income for the year ended December 31, 2001 in "Other income (expense)." ACCOUNTING STANDARDS In October 2001 the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 replaces SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" and provides updated guidance concerning the recognition and measurement of an impairment loss for certain types of long-lived assets. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001 with earlier application encouraged. The adoption of SFAS No. 144 in January 2002 by the Company has not had nor is it expected to have a material impact on the Company's consolidated results of operation, financial position or cash flow. In August 2001 the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses financial accounting and reporting obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002 with early adoption encouraged. Adoption of SFAS No. 143 in 2003 is not expected to have a material impact on the Company's consolidated results of operation, financial position or cash flow. In June 2001 the FASB issued two new pronouncements, SFAS No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that all business combinations be accounted for by the purchase method and applies to all business combinations initiated after June 30, 2001 and also applies to all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001 or later. There are also transition provisions...
Forward Exchange Contracts. The Company enters into forward exchange contracts in managing its foreign exchange risk on intercompany transactions and does not use the contracts for trading purposes. Gains and losses related to qualifying hedgxx xxx deferred and recognized in operating income when the underlying hedged transaction occurs. Premium payments on such contracts are amortized to expense over the life of the contracts. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are comprised primarily of money market accounts, foreign and domestic bank accounts, and tax-exempt municipal bonds with short-term maturities. To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company's cash and cash equivalents. Marketable Securities The Company's marketable securities are classified as "available for sale". Fluctuations in fair value are included in other comprehensive income. Marketable securities are comprised primarily of tax-exempt municipal bonds with contractual maturities of up to five years. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Fair Value of Financial Instruments The Company has estimated the fair value of its financial instruments using the following methods and assumptions: The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value because of the short term maturity of these instruments. Marketable securities are based on the quoted market prices for these instruments. Foreign exchange contracts are based on exchange rates at December 31, 1998. The fair value of option contracts are based on dealer quotes.
Forward Exchange Contracts
