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Foreign Currency Derivative Instruments
 12 Months Ended
Dec. 31, 2012
Foreign Currency Derivatives [Abstract]  
Foreign Currency Derivative Instruments
Foreign Currency Derivative Instruments
Maxwell uses forward contracts to hedge certain monetary assets and liabilities, primarily receivables and payables, denominated in a foreign currency. The change in fair value of these instruments represents a natural hedge as gains and losses offset the changes in the fair value of the underlying monetary assets and liabilities due to movements in currency exchange rates. These contracts generally expire in one month. These contracts are considered economic hedges but are not designated as hedges under the Derivatives and Hedging Topic of the FASB ASC, therefore, the change in the fair value of the instruments is recognized currently in the consolidated statement of operations.
The net gains and losses on foreign currency forward contracts included in "cost of revenue" and "selling, general and administrative" expense in the consolidated statements of operations are as follows (in thousands):
 
 
 
Year Ended
December 31,
 
 
2012
 
2011
 
2010
Cost of revenue
 
$
(2
)
 
$
(220
)
 
$
213

Selling, general and administrative
 
395

 
(453
)
 
1,625

Total gain (loss)
 
$
393

 
$
(673
)
 
$
1,838



The net gains and losses on foreign currency derivative contracts were partially offset by net gains and losses on the underlying monetary assets and liabilities. Foreign currency gains and losses on those underlying monetary assets and liabilities included in "cost of revenue" and "selling, general and administrative" expense in the consolidated statements of operations are as follows (in thousands):
 
 
 
Year Ended
December 31,
 
 
2012
 
2011
 
2010
Cost of revenue
 
$
13

 
$
108

 
$
717

Selling, general and administrative
 
(997
)
 
(315
)
 
(1,471
)
Total loss
 
$
(984
)
 
$
(207
)
 
$
(754
)


As of December 31, 2012, the total notional amount of foreign currency forward contracts not designated as hedges was $32.1 million. The fair value of these derivatives was a $329,000 asset at December 31, 2012. All of the forward contracts outstanding at December 31, 2012 mature on January 3, 2013. For additional information, refer to Note 6, Fair Value Measurements.