Equifax 2010 Annual Report Download - page 44

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
As used herein, the terms Equifax, the Company, we, our and us
refer to Equifax Inc., a Georgia corporation, and its consolidated
subsidiaries as a combined entity, except where it is clear that the
terms mean only Equifax Inc.
Nature of Operations. We collect, organize and manage various
types of financial, demographic, employment and marketing informa-
tion. Our products and services enable businesses to make credit
and service decisions, manage their portfolio risk, automate or out-
source certain payroll-related, tax and human resources business
processes, and develop marketing strategies concerning consumers
and commercial enterprises. We serve customers across a wide
range of industries, including the financial services, mortgage, retail,
telecommunications, utilities, automotive, brokerage, healthcare and
insurance industries, as well as government agencies. We also enable
consumers to manage and protect their financial health through a
portfolio of products offered directly to consumers. As of
December 31, 2010, we operated in the following countries:
Argentina, Brazil, Canada, Chile, Ecuador, El Salvador, Honduras,
Paraguay, Peru, Portugal, Spain, the United Kingdom, or U.K.,
Uruguay, and the United States of America, or U.S. We also maintain
support operations in Costa Rica and the Republic of Ireland. We
own an equity interest in a consumer credit information company in
Russia. During 2009, we formed a joint venture to provide a broad
range of credit data and information solutions in India.
We develop, maintain and enhance secured proprietary information
databases through the compilation of actual consumer data, includ-
ing credit, employment, asset, liquidity, net worth and spending
activity, and business data, including credit and business
demographics, that we obtain from a variety of sources, such as
credit granting institutions, public record information (including
bankruptcies, liens and judgments), income and tax information
primarily from large to mid-sized companies in the U.S., and survey-
based marketing information. We process this information utilizing our
proprietary information management systems.
We acquired Anakam, Inc., a provider of large-scale, software-based,
multi-factor authentication solutions, on October 1, 2010. We
acquired Rapid Reporting Verification Company, a provider of IRS tax
transcript information and social security number authentication
services, on November 2, 2009. On October 27, 2009, we acquired
IXI Corporation, a provider of consumer wealth and asset data. The
results of these and a number of smaller acquisitions are included in
our consolidated results subsequent to the acquisition dates.
Basis of Consolidation. Our Consolidated Financial Statements and
the accompanying notes, which are prepared in accordance with
U.S. generally accepted accounting principles, or GAAP, include
Equifax and all its subsidiaries. We consolidate all majority-owned
and controlled subsidiaries as well as variable interest entities in
which we are the primary beneficiary. Other parties’ interests in
consolidated entities are reported as noncontrolling interests. We use
the equity method of accounting for investments in which we are able
to exercise significant influence and use the cost method for all other
investments. All significant intercompany transactions and balances
are eliminated.
Our Consolidated Financial Statements reflect all adjustments which
are, in the opinion of management, necessary for a fair presentation
of the periods presented therein. Certain prior year amounts have
been reclassified to conform to current year presentation, including
selling, general and administrative expense of $13.2 million for the
twelve months ended December 31, 2008, which was reclassified to
cost of services. The effect of these reclassifications is not material.
Segments. We manage our business and report our financial results
through the following five reportable segments, which are the same
as operating segments:
• U.S. Consumer Information Solutions, or USCIS
• International
• TALX
• North America Personal Solutions
• North America Commercial Solutions
USCIS is our largest reportable segment, with 40% of total operating
revenue for 2010. Our most significant foreign operations are located
in Canada, the U.K. and Brazil.
Use of Estimates. The preparation of our Consolidated Financial
Statements requires us to make estimates and assumptions in
accordance with GAAP. Accordingly, we make these estimates and
assumptions after exercising judgment. We believe that the estimates
and assumptions inherent in our Consolidated Financial Statements
are reasonable, based upon information available to us at the time
they are made including the consideration of events that have
occurred up until the point these Statements have been filed. These
estimates and assumptions affect the reported amounts of assets,
liabilities, revenues and expenses, and disclosure of contingent
assets and liabilities at the date of the financial statements, as well as
reported amounts of revenues and expenses during the reporting
period. Actual results could differ materially from these estimates.
Revenue Recognition and Deferred Revenue. Revenue is
recognized when persuasive evidence of an arrangement exists, col-
lectibility of arrangement consideration is reasonably assured, the
arrangement fees are fixed or determinable and delivery of the
product or service has been completed. A significant portion of our
revenue is derived from our processing of transactions related to the
provision of information services to our customers, in which case
revenue is recognized, assuming all other revenue recognition criteria
are met, when the services are provided. A smaller portion of our
revenues relate to subscription-based contracts under which a
customer pays a preset fee for a predetermined or unlimited number
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EQUIFAX 2010 ANNUAL REPORT
42
42