because this third party had the right of first out in the case of a bankruptcy under an intercreditor agreement with Salus. During the year ended September 30, 2015, the Company recognized charge-offs of $76.6 and an additional net increase in the provision of credit losses of $24.8 related to the loan with RadioShack. No additional changes to the provision for credit losses were recorded during the three months ended December 31, 2015. The extent to which Salus and Front Street will be able to recover amounts owed to them by RadioShack is dependent on a number of factors, including the results of asset sales and ongoing litigation. There can be no assurance of the amount that Salus and its affiliates will recover from the RadioShack loan.
| | | | | | | | | | | | | | | | | | | | | | Internal Risk Rating | | Pass | | Special Mention | | Substandard | | Doubtful | | Total | December 31, 2015 | $ | 11.7 |
| | $ | 39.6 |
| | $ | 43.8 |
| | $ | 101.7 |
| | $ | 196.8 |
| September 30, 2015 (As Adjusted) | $ | 69.0 |
| | $ | 32.4 |
| | $ | 74.0 |
| | $ | 99.2 |
| | $ | 274.6 |
|
(6) Derivatives The fair value of outstanding derivatives recorded in the accompanying Condensed Consolidated Balance Sheets were as follows:
| | | | | | | | | | | | Asset Derivatives | | Classification | | December 31,
2015 | | September 30,
2015 | | | | | | | (As Adjusted) | Derivatives designated as hedging instruments: | | | | | | | Foreign exchange contracts | | Receivables, net | | $ | 6.7 |
| | $ | 5.2 |
| Foreign exchange contracts | | Other assets | | 0.8 |
| | 0.4 |
| Total asset derivatives designated as hedging instruments | | | | 7.5 |
| | 5.6 |
| Derivatives not designated as hedging instruments: | | | | | | | Call options | | Funds withheld receivables | | 8.1 |
| | 5.4 |
| Call options | | Other assets | | 2.2 |
| | 1.0 |
| Commodity contracts | | Receivables, net | | 1.3 |
| | 7.9 |
| Foreign exchange contracts | | Receivables, net | | 0.1 |
| | 0.4 |
| Total asset derivatives | | | | $ | 19.2 |
| | $ | 20.3 |
|
| | | | | | | | | | | | Liability Derivatives | | Classification | | December 31,
2015 | | September 30,
2015 | | | | | | | (As Adjusted) | Derivatives designated as hedging instruments: | | | | | | | Interest rate swaps | | Accounts payable and other current liabilities | | $ | 1.2 |
| | $ | 1.4 |
| Interest rate swaps | | Other liabilities | | 0.7 |
| | 1.2 |
| Commodity swaps | | Accounts payable and other current liabilities | | 4.3 |
| | 4.7 |
| Commodity swaps | | Other liabilities | | 0.8 |
| | 0.8 |
| Foreign exchange contracts | | Accounts payable and other current liabilities | | — |
| | 1.5 |
| Foreign exchange contracts | | Other liabilities | | 0.1 |
| | — |
| Total liability derivatives designated as hedging instruments | | | | 7.1 |
| | 9.6 |
| Derivatives not designated as hedging instruments: | | | | | | | Embedded derivatives in Front Street's assumed FIA business | | Insurance reserves | | 139.9 |
| | 142.3 |
| Foreign exchange | | Accounts payable and other current liabilities | | 0.6 |
| | 0.1 |
| Commodity contracts | | Accounts payable and other current liabilities | | — |
| | 0.1 |
| Total liability derivatives | | | | $ | 147.6 |
| | $ | 152.1 |
|
For derivative instruments that are used to economically hedge the fair value of Spectrum Brands’ third party and intercompany foreign currency payments, commodity purchases and interest rate payments, the gain (loss) associated with the derivative contract is recognized in earnings in the period of change. The Company recognizes all derivative instruments as assets or liabilities in the Condensed Consolidated Balance Sheets at fair value.
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