As part of our financial risk management program, we use certain derivative financial instruments. We do not enter into derivative transactions for speculative purposes and, therefore, we do not hold any derivative instruments for trading purposes. We account for derivative instruments as a hedge of the related asset, liability, firm commitment or anticipated transaction, when the derivative is specifically designated and qualifies as a hedge of such items. Our objective in managing foreign exchange exposures with derivative instruments is to reduce volatility in cash flow. We measure hedge effectiveness by assessing the changes in the fair value or expected future cash flows of the hedged item.

There were no derivatives designated as hedging instruments as of December 31, 2022 and June 30, 2022. The fair value of derivatives not designated as hedging instruments in the condensed consolidated balance sheets are as follows:


(in thousands)	December 31, 2022		June 30, 2022






Derivatives not designated as hedging instruments
Other current assets - currency forward contracts	$	99	$	176
Other current liabilities - currency forward contracts	(8)		(574)
Total derivatives not designated as hedging instruments	91		(398)
Total derivatives	$	91	$	(398)

Certain currency forward contracts that hedge significant cross-border intercompany loans are considered as other derivatives and therefore do not qualify for hedge accounting. These contracts are recorded at fair value in the condensed consolidated balance sheet, with the offset to other expense (income), net. (Gains) losses related to derivatives not designated as hedging instruments have been recognized as follows:


	Three Months Ended December 31,				Six Months Ended December 31,
(in thousands)	2022		2021		2022		2021
Other expense (income), net - currency forward contracts	$	(197)	$	(134)	$	(503)	$	6

As of December 31, 2022 and June 30, 2022, we had certain foreign currency-denominated intercompany loans payable with total aggregate principal amounts of €17.0 million and €13.0 million, respectively, designated as net investment hedges to hedge the foreign exchange exposure of our net investment in our Euro-based subsidiaries. A loss of $0.4 million and a gain of $0.1 million were recorded as a component of foreign currency translation adjustments in other comprehensive income for the three months ended December 31, 2022 and 2021, respectively. Gains of $1.3 million and $1.4 million were recorded as a component of foreign currency translation adjustments in other comprehensive loss for the six months ended December 31, 2022 and 2021, respectively.


Instrument	Notional (EUR in thousands)(2)		Notional (USD in thousands)(2)		Maturity
Foreign currency-denominated intercompany loan payable	€	17,040	$	18,182	June 30, 2023