Vistaprint 2013 Annual Report Download - page 59

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VISTAPRINT N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended June 30, 2013, 2012 and 2011
(in thousands, except share and per share data)
1. Description of the Business
The Vistaprint group of companies offers micro businesses the ability to market their businesses with a
broad range of brand identity and promotional products, marketing services and digital solutions. Through the use
of proprietary Internet-based graphic design software, localized websites, proprietary order receiving and
processing technologies and advanced computer integrated production facilities, we offer a broad spectrum of
products, such as business cards, website hosting, apparel, signage, promotional gifts, brochures, online marketing
and creative services. We focus on serving the marketing, graphic design and printing needs of the micro business
market, generally businesses or organizations with fewer than 10 employees and usually 2 or fewer. We also
provide personalized products for home and family use.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Vistaprint N.V., its wholly owned subsidiaries,
and those entities in which we have a variable interest and are the primary beneficiary. Intercompany balances and
transactions have been eliminated. Investments in entities in which we can exercise significant influence, but do not
own a majority equity interest or otherwise control, are accounted for using the equity method and are included as
investments in equity interests on the consolidated balance sheets.
Certain reclassifications have been made in the prior period consolidated financial statements to conform to
the current presentation.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles
("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. We believe our most significant estimates are
associated with the ongoing evaluation of the recoverability of our long-lived assets and goodwill, advertising
expense and related accruals, share-based compensation, accounting for business combinations and equity
method investments, income taxes, and litigation and contingencies, among others. By their nature, estimates are
subject to an inherent degree of uncertainty. Actual results could differ from those estimates.
During the second fiscal quarter of our 2013 fiscal year, we revised our interim accrual practice for cash
incentive compensation that is paid based on achievement of annual performance targets. Historically, the related
costs were accrued each interim period based upon the weight of year-to-date results relative to the forecasted
annual target; however, due to fluctuations in the pattern of quarterly results relative to historical trends and interim
periods of net loss, we believe a straight-line attribution method better matches the pattern of how the employee
earns the award. This change in practice does not affect full year net income, but does affect the trend of quarterly
earnings relative to past interim periods.
Cash and Cash Equivalents
We consider all highly liquid investments purchased with an original maturity of three months or less to be
the equivalent of cash for the purpose of balance sheet and statement of cash flows presentation. Cash equivalents
consist of depository accounts and money market funds. Cash and cash equivalents restricted for use were $1,510
and $1,645 as of June 30, 2013 and 2012, respectively, and are included in other assets in the accompanying
consolidated balance sheets.
Accounts Receivable
Accounts receivable includes amounts due from customers and partners. We offset gross trade accounts
receivable with an allowance for doubtful accounts, which is our best estimate of the amount of probable credit