Company: ACCO
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000950170-25-024931
Chunk: 196

Company: ACCO BRANDS Corp
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1B
Chunk 196
---
 Swedish krona, British pound and Japanese yen. We are subject to credit risk, which relates to the ability of counterparties to meet their contractual payment obligations or the potential non-performance by counterparties to financial instrument contracts. Management continues to monitor the status of our counterparties and will take action, as appropriate, to further manage our counterparty credit risk. There are no credit contingency features in our derivative financial instruments. When hedge accounting is applicable, on the date we enter into a derivative, the derivative is designated as a hedge of the identified exposure. We measure the effectiveness of our hedging relationships both at hedge inception and on an ongoing basis. 

80

 ACCO Brands Corporation and SubsidiariesNotes to Consolidated Financial Statements (Continued) 

Forward Currency Contracts We enter into forward foreign currency contracts with third parties to reduce the effect of fluctuating foreign currencies, primarily on foreign denominated inventory purchases and intercompany loans. Our primary exposure to currency movements is in the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the Mexican peso. Forward currency contracts are used to hedge foreign denominated inventory purchases for Europe, Australia, Canada, Japan and New Zealand, and are designated as cash flow hedges. Unrealized gains and losses on these contracts are deferred in AOCI until the contracts are settled and the underlying hedged transactions relating to inventory purchases are recognized, at which time the deferred gains or losses will be reported in the "Cost of products sold" line in the Consolidated Statements of Income. As of December 31, 2024 and 2023, we had cash flow foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $76.9 million and $80.2 million, respectively, which were designated as hedges. Forward currency contracts used to hedge foreign denominated intercompany loans are not designated as hedging instruments. Gains and losses on these derivative instruments are recognized within "Other expense (income), net" in the Consolidated Statements of Income and are largely offset by the change in the current translated value of the hedged item. The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions, with some relating to intercompany loans which extend beyond December 2025. As of December 31, 2024 and 2023, we had foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $73.6 million and $