Vistaprint 2012 Annual Report Download - page 65

61
Amortization of previously capitalized amounts in the years ended June 30, 2012, 2011 and 2010 was
$6,325, $6,653 and $6,780, respectively, resulting in accumulated amortization of $11,864 and $12,370 at June 30,
2012 and 2011, respectively.
Leases
We categorize leases at their inception as either operating or capital leases. Costs for operating leases that
include incentives such as payment escalations or rent abatements are recognized on a straight-line basis over the
term of the lease. Additionally, inducements received are treated as a reduction of our costs over the term of the
agreement. Leasehold improvements are capitalized at cost and amortized over the shorter of their expected useful
life or the life of the lease, excluding renewal periods.
Intangible Assets
We capitalize the costs of purchasing patents from unrelated third parties and amortize these costs over the
estimated useful life of the patent. The costs related to patent applications, pursuing others who we believe infringe
on our patents, and defending against patent-infringement claims are expensed as incurred.
We record acquired intangible assets at fair value on the date of acquisition and amortize such assets using
the straight-line method over the expected useful life of the asset, unless another amortization method is deemed to
be more appropriate. We evaluate the remaining useful life of intangible assets on a periodic basis to determine
whether events and circumstances warrant a revision to the remaining useful life. If the estimate of an intangible
asset’s remaining useful life is changed, we amortize the remaining carrying value of the intangible asset
prospectively over the revised remaining useful life.
Long-Lived Assets
Definite lived long-lived assets, other than goodwill, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that
would necessitate an impairment assessment include a significant decline in the observable market value of an
asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse
change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.
For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount
is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment
loss based on the difference between the carrying amount and estimated fair value. Long-lived assets are
considered held for sale when certain criteria are met, including when management has committed to a plan to sell
the asset, the asset is available for sale in its immediate condition, and the sale is probable within one year of the
reporting date. Assets held for sale are reported at the lower of cost or fair value less costs to sell. We did not have
any assets held for sale as of June 30, 2012 or 2011.
No impairment charges were recorded for the year ended June 30, 2012. For the fiscal years ended, June
30, 2011 and 2010 we recorded impairment charges on long-lived assets of $252 and $514, respectively.
Business Combinations
We assign the value of the consideration transferred to acquire a business to the tangible and intangible
assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. We assess the fair
value of assets, including intangible assets, using a variety of methods and each asset is measured at fair value
from the perspective of a market participant. The method used to estimate the fair values of intangible assets
incorporates significant assumptions regarding the estimates a market participant would make in order to evaluate
an asset, including a market participant’s use of the asset and the appropriate discount rates for a market
participant. Assets recorded from the perspective of a market participant that are determined to not have economic
use for us are expensed immediately. Any excess purchase price over the fair value of the net tangible and
intangible assets acquired is allocated to goodwill. Transaction costs and restructuring costs associated with a
business combination are expensed as incurred.
Form 10-K