Vistaprint 2012 Annual Report Download - page 68

64
The following table sets forth the reconciliation of the weighted-average number of ordinary shares:
Year Ended June 30,
2012 2011 2010
Weighted average shares outstanding, basic . . . . . . . . . . . . . . . . . . . 37,813,504 43,431,326 43,365,872
Weighted average shares issuable upon exercise/vesting of
outstanding share options/RSUs/RSAs . . . . . . . . . . . . . . . . . . . . . . . 1,139,675 1,519,873 1,970,689
Shares used in computing diluted net income per share . . . . . . . . . . 38,953,179 44,951,199 45,336,561
Weighted average anti-dilutive shares excluded from diluted net
income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,495,858 640,214 259,398
Compensation Expense
Share-Based Compensation
Compensation expense for all share-based awards expected to vest is measured at fair value on the date
of grant and recognized over the requisite service period. The fair value of share options is determined using the
Black-Scholes valuation model, or lattice model for share options with a market condition, and the fair value of
RSUs and RSAs is determined based on the number of shares granted and the quoted price of our ordinary shares.
Such value is recognized ratably as expense over the requisite service period, or on an accelerated method for
awards with a performance or market condition, net of estimated forfeitures. The estimation of share awards that will
ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current
estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We
consider many factors when estimating expected forfeitures, including types of awards, employee class, and
historical experience. For awards with a performance condition vesting feature, compensation cost is recorded if it
is probable that the performance condition will be achieved.
Sabbatical Leave
Compensation expense associated with a sabbatical leave, or other similar benefit arrangements, is
accrued over the requisite service period during which an employee earns the benefit, net of estimated forfeitures,
and is included in other liabilities on our consolidated balance sheets.
Concentrations of Credit Risk
We monitor the creditworthiness of our customers to which we grant credit terms in the normal course of
business. We had one customer that represented 32% of our total accounts receivable at June 30, 2012.
We maintain an allowance for doubtful accounts for potential credit losses based upon specific customer
accounts and historical trends, and such losses to date in the aggregate have not materially exceeded our
expectations.
Recently Adopted Accounting Pronouncements
Effective January 1, 2012, we adopted ASU 2011-04 Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASU 2011-04”), which is intended to result in
convergence between U.S. GAAP and International Financial Reporting Standards requirements for measurement
of, and disclosures about, fair value. ASU 2011-04 clarifies or changes certain fair value measurement principles
and enhances the disclosure requirements particularly for Level 3 fair value measurements. The adoption of this
ASU did not have a material effect on our financial position or results of operations.
In June 2011, we elected to early adopt ASU 2011-05 Presentation of Comprehensive Income, which
makes the presentation of items within other comprehensive income (“OCI”) more prominent. The new standard
requires companies to present items of net income, items of OCI and total comprehensive income in one
continuous statement or two separate consecutive statements, and companies will no longer be allowed to present
items of OCI in the statement of shareholders’ equity. The FASB finalized a proposal to defer the requirement to