Equifax 2015 Annual Report Download - page 29

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A portion of the Company’s business is conducted in currencies other than the U.S. dollar, and changes in foreign
exchange rates relative to the U.S. dollar can therefore affect the value of non-U.S. dollar net assets, revenues and expenses.
Potential exposures as a result of these fluctuations in currencies are closely monitored. We generally do not mitigate the risks
associated with fluctuating exchange rates, although we may from time to time through forward contracts or other derivative
instruments hedge a portion of our translational foreign currency exposure or exchange rate risks associated with material
transactions which are denominated in a foreign currency.
RECENT ACCOUNTING PRONOUNCEMENTS
For information about new accounting pronouncements and the potential impact on our Consolidated Financial
Statements, see Note 1 of the Notes to Consolidated Financial Statements in this report.
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company’s Consolidated Financial Statements are prepared in conformity with U.S. generally accepted
accounting principles, or GAAP. This requires our management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in our
Consolidated Financial Statements and the Notes to Consolidated Financial Statements. The following accounting policies
involve critical accounting estimates because they are particularly dependent on estimates and assumptions made by
management about matters that are uncertain at the time the accounting estimates are made. In addition, while we have used
our best estimates based on facts and circumstances available to us at the time, different estimates reasonably could have been
used in the current period, or changes in the accounting estimates that we used are reasonably likely to occur from period to
period, either of which may have a material impact on the presentation of our Consolidated Balance Sheets and Statements of
Income. We also have other significant accounting policies which involve the use of estimates, judgments and assumptions that
are relevant to understanding our results. For additional information about these policies, see Note 1 of the Notes to
Consolidated Financial Statements in this report. Although we believe that our estimates, assumptions and judgments are
reasonable, they are based upon information available at the time. Actual results may differ significantly from these estimates
under different assumptions, judgments or conditions.
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, collectibility of arrangement consideration
is reasonably assured, the arrangement fees are fixed or determinable and delivery of the product or service has been
completed. A significant portion of our revenue is derived from the provision of information services to our customers on a
transaction basis, in which case revenue is recognized, assuming all other revenue recognition criteria are met, when the
services are provided. A smaller portion of our revenues relate to subscription-based contracts under which a customer pays a
preset fee for a predetermined or unlimited number of transactions or services provided during the subscription period,
generally one year. Revenue related to subscription-based contracts having a preset number of transactions is recognized as the
services are provided, using an effective transaction rate as the actual transactions are completed. Any remaining revenue
related to unfulfilled units is not recognized until the end of the related contract’s subscription period. Revenue related to
subscription-based contracts having an unlimited volume is recognized ratably during the contract term. Revenue is recorded
net of sales taxes.
If at the outset of an arrangement, we determine that collectibility is not reasonably assured, revenue is deferred until
the earlier of when collectibility becomes probable or the receipt of payment. If there is uncertainty as to the customer’s
acceptance of our deliverables, revenue is not recognized until the earlier of receipt of customer acceptance or expiration of the
acceptance period. If at the outset of an arrangement, we determine that the arrangement fee is not fixed or determinable,
revenue is deferred until the arrangement fee becomes fixed or determinable, assuming all other revenue recognition criteria
have been met.
The determination of certain of our tax management services revenue requires the use of estimates, principally related
to transaction volumes in instances where these volumes are reported to us by our clients on a monthly basis in arrears. In these
instances, we estimate transaction volumes based on average actual volumes reported in the past. Differences between our
estimates and actual final volumes reported are recorded in the period in which actual volumes are reported. We have not
experienced significant variances between our estimates and actual reported volumes in the past. We monitor actual volumes to
ensure that we will continue to make reasonable estimates in the future. If we determine that we are unable to make reasonable
future estimates, revenue may be deferred until actual customer data is obtained. Also within our Workforce Solutions operating
segment, the fees for certain of our tax credits and incentives revenue are based on a percentage of the credit delivered to our
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