NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The fair value of the forward exchange contracts is determined by the difference between the contracted  foreign exchange rates and the foreign exchange forward rates at the period end date using the contracted  amounts. The fair value measurement of the forward exchange contracts has a fair value hierarchy of Level 2.  The Company guaranteed bank loans made to joint venture partners and has provided an assignment of  monies on deposit with respect to these loans. The Company has recorded the loan guarantee benefit at its  fair value of $106,000 (2012 - $nil). The fair value measurement of the financial guarantee benefit has a fair  value hierarchy of Level 2.  The Company is exposed to various risks associated with its financial instruments. These risks are categorized  as credit risk, foreign currency risk, and liquidity risk. In addition, the Company is indirectly exposed to interest  rate risk since the Company is typically non-borrowing and is directly exposed to fluctuations in interest rates  through its investment in bank guaranteed highly liquid investments. The Company is also indirectly exposed  to commodity risk relating to commodity prices due to the industry in which it works. The credit risk associated with accounts receivable is generally considered low since substantially all  counterparties are well-established and financed oil and gas companies. The Company has detailed credit- granting procedures and in certain circumstances may require customers to make advance payment prior  to the provision of services or take other measures to help reduce credit risk. Management has estimated  provisions to recognize potential impairments, which have been included in the accounts. The Company’s accounts receivable shows no significant credit risk exposure in the balances outstanding at  December 31. Terms of the Company’s contracts generally require payment within 30 days. The Company is exposed to changes in foreign exchange rates as capital expenditures or financial instruments  may fluctuate due to changing rates. To mitigate this risk the Company entered into foreign exchange forward  contracts that will mature in the second quarter of 2014. At December 31, 2013, the Company had outstanding  contracts to buy a total of US$13 Million at an average rate of Canadian dollars 1.0499 to the US dollar. At  December 31, 2013, these contracts were marked to market resulting in an unrealized foreign exchange gain of  $235,000 (2012 - $nil) that was recognized in the Consolidated Statement of Net Income and Comprehensive  Income and has been classified on the Statement of Financial Position as other current assets. Foreign Currency Risk Credit Risk Financial Instrument Risk Exposure and Management Financial Guarantee Contracts 48 AKITA DRILLING LTD.  ANNUAL REPORT $Thousands  December 31 2013 December 31 2012 Within 30 days  $ 32,315   $ 48,585 31 to 60 days 7,815  7,162  61 - 90 days 2,028  3,293 Over 90 days 290 1,074 Allowance for doubtful accounts (106) (110) Accounts receivable $ 42,342 $ 60,004