Equifax 2008 Annual Report Download - page 42

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
entities are reported as minority interests. We use the
1. SUMMARY OF SIGNIFICANT ACCOUNTING equity method of accounting for investments in which we
POLICIES are able to exercise significant influence and use the cost
method for all other investments. All significant intercom-
As used herein, the terms Equifax, the Company, we, our pany transactions and balances are eliminated.
and us refer to Equifax Inc., a Georgia corporation, and its
consolidated subsidiaries as a combined entity, except Our Consolidated Financial Statements reflect all adjust-
where it is clear that the terms mean only Equifax Inc. ments which are, in the opinion of management, necessary
for a fair presentation of the periods presented therein. We
Nature of Operations. We collect, organize and manage have reclassified certain prior period amounts in our Con-
various types of financial, demographic, employment and solidated Financial Statements to conform to the current
marketing information. Our products and services enable period presentation. The effect of these reclassifications is
businesses to make credit and service decisions, manage not material.
their portfolio risk, automate or outsource certain payroll,
tax and human resources business processes, and develop Segments. Effective with our organizational realignment on
marketing strategies concerning consumers and commer- January 1, 2007, we manage our business and report our
cial enterprises. We serve customers across a wide range financial results through the following five reportable seg-
of industries, including the financial services, mortgage, ments, which are the same as operating segments:
retail, telecommunications, utilities, automotive, brokerage, • U.S. Consumer Information Solutions, or USCIS
healthcare and insurance industries, as well as government • International
agencies. We also enable consumers to manage and pro- • TALX
tect their financial health through a portfolio of products • North America Personal Solutions
offered directly to consumers. As of December 31, 2008, • North America Commercial Solutions
we operated in the following countries: Argentina, Brazil, USCIS is our largest reportable segment, with 46% of total
Canada, Chile, Ecuador, El Salvador, Honduras, Peru, Por- operating revenue during 2008. Our most significant foreign
tugal, Spain, the United Kingdom, or U.K., Uruguay, and operations are located in Canada, the U.K. and Brazil.
the United States of America, or U.S. We also maintain
support operations in Costa Rica and the Republic of Ire- Use of Estimates. The preparation of our Consolidated
land. During 2008, we expanded into Russia by acquiring Financial Statements requires us to make estimates and
an equity interest in a consumer credit information assumptions in accordance with GAAP. Accordingly, we
company. make these estimates and assumptions after exercising
judgment. We believe that the estimates and assumptions
We develop, maintain and enhance secured proprietary inherent in our Consolidated Financial Statements are rea-
information databases through the compilation of credit sonable, based upon information available to us at the time
and employment information about consumers and busi- they are made including the consideration of events that
nesses that we obtain from a variety of sources, such as have occurred up until the point these Statements have
credit granting institutions, public record information (includ- been filed. These estimates and assumptions affect the
ing bankruptcies, liens and judgments), income and tax reported amounts of assets, liabilities, revenues and
information primarily from large to mid-sized companies in expenses, and disclosure of contingent assets and liabilities
the U.S., and marketing information from surveys and war- at the date of the financial statements, as well as reported
ranty cards. We process this information utilizing our propri- amounts of revenues and expenses during the reporting
etary information management systems. period. Actual results could differ materially from these
We acquired TALX Corporation, or TALX, a leading provider estimates.
of employment and income verification and human Revenue Recognition and Deferred Revenue. Revenue
resources business process outsourcing services, on is recognized when persuasive evidence of an arrangement
May 15, 2007 and its results are included in our results exists, collectibility of arrangement consideration is reason-
from that date. ably assured, the arrangement fees are fixed or determina-
Basis of Consolidation. Our Consolidated Financial State- ble and delivery of the product or service has been com-
ments and the accompanying notes, which are prepared in pleted. A significant portion of our revenue is derived from
accordance with U.S. generally accepted accounting princi- our processing of transactions related to the provision of
ples, or GAAP, include Equifax and all its subsidiaries. We information services to our customers, in which case reve-
consolidate all majority-owned and controlled subsidiaries nue is recognized, assuming all other revenue recognition
as well as variable interest entities in which we are the criteria are met, when the services are provided. A smaller
primary beneficiary as defined by Financial Accounting portion of our revenues relate to subscription-based con-
Standards Board, or FASB, Interpretation, or FIN, No. 46R, tracts under which a customer pays a preset fee for a
‘‘Consolidation of Variable Interest Entities, an Interpretation predetermined or unlimited number of transactions or ser-
of ARB No. 51.’’ Other parties’ interests in consolidated vices provided during the subscription period, generally one
40 EQUIFAX INC.