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Financial Instruments
 12 Months Ended
Dec. 28, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments
FINANCIAL INSTRUMENTS

ASC 815 “Derivatives and Hedging” requires an entity to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Derivatives that do not qualify as a hedge must be adjusted to fair value in earnings. If a derivative does qualify as a hedge under ASC 815, changes in the fair value will either be offset against the change in the fair value of the hedged assets, liabilities or firm commitments or recognized in other accumulated comprehensive income until the hedged item is recognized in earnings.
On December 30, 2018, the company adopted the new accounting standard ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities" using the modified retrospective method. Prior to the adoption of ASU 2017-12, the ineffective portion of a hedge's change in fair value was recognized in earnings. Upon adoption of ASU 2017-12, the company no longer recognizes hedge ineffectiveness in our Consolidated Statements of Comprehensive Income, but instead recognizes the entire change in the fair value of the hedge contract in other accumulated comprehensive income.
 
(a)
Foreign Exchange

The company periodically enters into derivative instruments, principally forward contracts to reduce exposures pertaining to fluctuations in foreign exchange rates. The fair value of these forward contracts was an unrealized loss of $0.9 million at the end of the year.
 
(b)
Interest Rate

The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. The agreements swap one-month LIBOR for fixed rates. The company has designated these swaps as cash flow hedges and all changes in fair value of the swaps are recognized in accumulated other comprehensive income. The fair value of these instruments was a liability of $23.3 million and an asset of $9.4 million as of December 28, 2019 and December 29, 2018, respectively. The change in fair value of these swap agreements in 2019 was a loss of $24.1 million, net of taxes.
 
A summary of the company’s interest rate swaps is as follows (in thousands):
 
 
 
Twelve Months Ended
 
Location
 
Dec 28, 2019

 
Dec 29, 2018

Fair value
Other assets
 
$
1,830

 
$
13,487

Fair value
Other non-current liabilities
 
$
25,120

 
$
4,125

Amount of gain/(loss) recognized in other comprehensive income
Other comprehensive income
 
$
(31,396
)
 
$
(561
)
Gain/(loss) reclassified from accumulated other comprehensive income (effective portion)
Interest expense
 
$
1,256

 
$
415

Gain/(loss) recognized in income (ineffective portion)
Other expense
 
$
—

 
$
72



Interest rate swaps are subject to default risk to the extent the counterparty is unable to satisfy its settlement obligations under the interest rate swap agreements. The company reviews the credit profile of the financial institutions that are counterparties to such swap agreements and assesses their creditworthiness prior to entering into the interest rate swap agreements and throughout the term. The interest rate swap agreements typically contain provisions that allow the counterparty to require early settlement in the event that the company becomes insolvent or is unable to maintain compliance with its covenants under its existing debt agreement.