Vistaprint 2012 Annual Report Download - page 66

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Goodwill
Goodwill is evaluated for impairment on an annual basis during the fiscal third quarter or more frequently
when an event occurs or circumstances change that indicate that the carrying value may not be recoverable.
During the third quarter of 2012, we early adopted the new accounting guidance that allows entities to perform a
qualitative assessment on goodwill impairment to determine whether quantitative assessment is necessary. In
doing so, we evaluated goodwill for our reporting units in a qualitative manner and have determined that is not more
likely than not that an impairment had occurred. There have been no indications of impairment that would require
an updated analysis as of June 30, 2012.
Debt Issuance Costs
Expenses associated with the issuance of debt instruments are capitalized and are amortized over the
terms of the respective financing arrangement using the effective interest method, or on a straight-line basis through
the maturity date for our revolving credit facility. During the year ended June 30, 2012, we capitalized debt issuance
costs related to our revolving credit facility of $1,819. Amortization of these costs is included as a component of
interest expense in the consolidated statements of operations and amounted to $206 for the year ended June 30,
2012. Debt issuance costs recognized in the consolidated balance sheets was $1,613 as of June 30, 2012. There
were no debt issuance costs capitalized or amortized in the others years presented.
Shareholders’ Equity
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) is
composed of net income, unrealized gains and losses on marketable securities and derivatives, and cumulative
foreign currency translation adjustments, which are disclosed in the accompanying consolidated statements of
comprehensive income.
Treasury Shares
Treasury shares are accounted for under the cost method and included as a component of shareholders’
equity. During the year ended June 30, 2012, we purchased 9,900,980 of our ordinary shares for a total cost of
$309,701, inclusive of transaction costs, in connection with our publicly announced share purchase programs.
Revenue Recognition
We generate revenue primarily from the sale and shipping of customized manufactured products, as well as
providing digital services, website design and hosting, email marketing services and order referral fees. We
recognize revenue arising from sales of products and services when it is realized or realizable and earned. We
consider revenue realized or realizable and earned when it has persuasive evidence of an arrangement, the product
has been shipped or service rendered with no significant post-delivery obligations on our part, the net sales price is
fixed or determinable and collectability is reasonably assured. For subscription services we recognize revenue for
the fees charged to customers ratably over the term of the service arrangement. Revenue is recognized net of
discounts we offer to our customers as part of advertising campaigns. Revenues from sales of prepaid orders on
our websites are deferred until shipment of fulfilled orders or until the prepaid service has been rendered.
Shipping, handling and processing costs billed to customers are included in revenue and the related costs
are included in cost of revenue. Sales and purchases in jurisdictions which are subject to indirect taxes, such as
value added tax (“VAT”), are recorded net of tax collected and paid as we act as an agent for the government.
For promotions through group buying websites, we recognize revenue on a gross basis, as we are the
primary obligor, when redeemed items are shipped.
A reserve for sales returns and allowances is recorded based on historical experience or specific
identification of an event necessitating a reserve.