Equifax 2015 Annual Report Download - page 30

– 29 –
clients. Revenue for these arrangements is recognized based on the achievement of milestones, upon calculation of the credit,
or when the credit is utilized by our client, depending on the provisions of the client contract.
We have certain offerings that are sold as multiple element arrangements. The multiple elements may include
consumer or commercial information, file updates for certain solutions, services provided by our decisioning technologies
personnel, training services, statistical models and other services. To account for each of these elements separately, the
delivered elements must have stand-alone value to our customer. If we are unable to unbundle the arrangement into separate
units of accounting, we apply one of the accounting policies described above. This may lead to the arrangement consideration
being recognized as the final contract element is delivered to our customer or ratably over the contract.
Many of our multiple element arrangements involve the delivery of services generated by a combination of services
provided by one or more of our operating segments. No individual information service impacts the value or usage of other
information services included in an arrangement and each service can be sold alone or, in most cases, purchased from another
vendor without affecting the quality of use or value to the customer of the other information services included in the
arrangement. Some of our products require the development of interfaces or platforms by our decisioning technologies
personnel that allow our customers to interact with our proprietary information databases. These development services do not
meet the requirement for having stand-alone value, thus any related development fees are deferred when billed and are
recognized over the expected period that the customer will benefit from the related decisioning technologies service. Revenue
from the provision of statistical models is recognized as the service is provided and accepted, assuming all other revenue
recognition criteria are met. The direct costs of set up of a customer are capitalized and amortized as a cost of service during the
term of the related customer contract.
We have some multiple element arrangements that include software. We recognize the elements for which we have
established vendor specific objective evidence at fair value upon delivery, in accordance with the applicable guidance.
We record revenue on a net basis for those sales in which we have in substance acted as an agent or broker in the
transaction.
The debt collections and recovery management revenue is calculated as a percentage of debt collected on behalf of the
customer and, as such, is primarily recognized when the cash is collected assuming all other revenue recognition criteria are
met.
Deferred revenue consists of amounts billed and collected in excess of revenue recognized on sales relating generally
to the deferral of subscription fees and arrangement consideration from elements not meeting the criteria for having stand-alone
value discussed above. Deferred revenues are subsequently recognized as revenue in accordance with our revenue recognition
policies.
Judgmentsanduncertainties— Each element of a multiple element arrangement must be considered separately to
ensure that appropriate accounting is performed for these deliverables. These considerations include assessing the price at
which the element is sold compared to its relative fair value; concluding when the element will be delivered; evaluating
collectibility; and determining whether any contingencies exist in the related customer contract that impact the prices paid to us
for the services.
In addition, as stated above, the determination of certain of our marketing information services and 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.
Effectsifactualresultsdifferfromassumptions— We have not experienced significant variances between our
estimates of marketing information services and tax management services revenues reported to us by our customers 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. However, if actual results are not consistent with our estimates and assumptions, or if our customer
arrangements become more complex or include more bundled offerings in the future, we may be required to recognize revenue
differently in the future to account for these changes. We do not believe there is a reasonable likelihood that there will be a
material change in the future estimates or assumptions we use to recognize revenue.
46
CONTENTS