Vistaprint 2013 Annual Report Download - page 65

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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 partner that represented 35% and 32% of our total accounts receivable as of June 30, 2013
and 2012, respectively. We do not have any customers that accounted for greater than 10% of our revenue for the
fiscal years ended June 30, 2013, 2012 or 2011.
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 Issued or Adopted Accounting Pronouncements
Effective January 1, 2013 we adopted ASU 2013-02, "Reporting Amounts Reclassified Out of Accumulated
Other Comprehensive Income." ASU 2013-02 requires an entity to disclose amounts reclassified out of other
comprehensive income by component. In addition, an entity is required to present, either on the face of financial
statements or in a single note, significant amounts reclassified out of accumulated other comprehensive income
and the income statement line item affected by the reclassification. The adoption of this ASU did not have a material
effect on our financial position or results of operations. See footnote 5 for further details.
In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of
Disclosures about Offsetting Assets and Liabilities", which clarifies the scope of the offsetting disclosures of ASU
2011-11. This amendment requires disclosing and reconciling gross and net amounts for financial instruments that
are offset in the balance sheet, and amounts for financial instruments that are subject to master netting
arrangements and other similar clearing and repurchase arrangements. We adopted ASU 2013-01 effective
January 1, 2013, which did not have a material impact on our disclosures.
3. Fair Value Measurements
We use a three-level valuation hierarchy for measuring fair value and include detailed financial statement
disclosures about fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the
valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
• Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities
in active markets.
• Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active
markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially
the full term of the financial instrument.
• Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input
that is significant to the fair value measurement.