Company: PERI
Filing Date: 2025-03-25
Form Type: 20-F
Source: 0001178913-25-001021
Chunk: 169

Company: Perion Network Ltd.
Filing Date: 2025-03-25
Form: 20-F
Item: Item 18
Chunk 169
---
 the type of hedging transaction. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

 
Changes in the fair value of these derivatives are recorded in accumulated other comprehensive income in the consolidated balance sheets, until the forecasted transaction occurs. Upon occurrence, the Company reclassifies the related gains or losses on the derivative to the same financial statement line item in the consolidated statements of income to which the derivative relates.

 
 In order to mitigate the potential adverse impact on cash flows resulting from fluctuations in the exchange rate of the new Israeli shekels (“ILS”), the Company hedges portions of its forecasted expenses denominated in ILS with SWAP, forward and options contracts. The Company does not speculate in these hedging instruments in order to profit from foreign currency exchanges, nor does it enter into trades for which there are no underlying exposures.
 
   F - 20

PERION NETWORK LTD. AND ITS SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 U.S. dollars in thousands (except share and per share data)
 
NOTE 2:  SIGNIFICANT ACCOUNTING POLICIES (Cont.)
 
 To protect against the increase in value of forecasted foreign currency cash flow resulting mainly from salaries and related benefits paid in ILS during the year, the Company hedges portions of its anticipated payroll denominated in ILS for a period of one to twelve months with SWAP, forward and options contracts (the “Hedging Contracts”). Accordingly, when the USD strengthens against the ILS, the decline in present value of future ILS currency expenses is offset by losses in the fair value of the Hedging Contracts. Conversely, when the USD weakens, the increase in the present value of future ILS expenses is offset by gains in the fair value of the Hedging Contracts. These Hedging Contracts are designated as cash flow hedges.

The notional value of the Company’s derivative instruments designed as hedging instruments as of December 31, 2024 and 2023, amounted to $4,971 and $6,006, respectively.
 
The notional value of the Company’s derivative instruments not designed as hedging instruments as of December 31, 2024 and 2023, amounted to $0. Notional values in USD are translated and calculated based