Equifax 2015 Annual Report Download - page 52

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Fair Value Measurements at Reporting Date Using:
Description
Fair Value at
December 31, 2015
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs
(Level 3)
(Inmillions)
Assets and Liabilities:
Foreign Currency Options (1) $ 14.4 $ — $ 14.4 $ —
Deferred Compensation Plan Assets (2) 24.9 24.9 — —
Deferred Compensation Plan Liability (2) (24.9) — (24.9) —
Total assets and liabilities $ 14.4 $ 24.9 $ (10.5) $ —
(1) The fair value of our call options, designated as economic hedges, are calculated using a valuation model based on the
underlying currency exchange rates and related volatility, and are classified within Level 2 of the fair value hierarchy.
(2) We maintain deferred compensation plans that allow for certain management employees to defer the receipt of
compensation (such as salary, incentive compensation and commissions) until a later date based on the terms of the
plans. The liability representing benefits accrued for plan participants is valued at the quoted market prices of the
participants’ investment elections. The asset consists of mutual funds reflective of the participants investment
selections and is valued at daily quoted market prices.
Variable Interest Entities. We hold interests in certain entities, including credit data, information solutions and debt
collections and recovery management ventures, that are considered variable interest entities, or VIEs. These variable interests
relate to ownership interests that require financial support for these entities. Our investments related to these VIEs totaled
$10.5 million at December 31, 2015, representing our maximum exposure to loss, with the exception of the guarantees
referenced in Note 7. We are not the primary beneficiary and are not required to consolidate any of these VIEs, with the
exception of a debt collections and recovery management venture, for which we meet the consolidation criteria under ASC 810.
In regards to that consolidated VIE, we have a 75% equity ownership interest and control of the activities that most
significantly impact the VIE's economic performance. The assets and liabilities of the VIE for which we are the primary
beneficiary were not significant to the Company’s consolidated financial statements, and no gain or loss was recognized
because of its consolidation.
In evaluating whether we have the power to direct the activities of a VIE that most significantly impact its economic
performance, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is
engaged and our decision-making role, if any, in those activities that significantly determine the entity's economic performance
as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant
to decision-making that affects the entity's future performance and the exercise of professional judgment in deciding which
decision-making rights are most important.
In determining whether we have the right to receive benefits or the obligation to absorb losses that could potentially be
significant to the VIE, we evaluate all of our economic interests in the entity, regardless of form (debt, equity, management and
servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity's design,
including: the entity's capital structure, contractual rights to earnings (losses), subordination of our interests relative to those of
other investors, contingent payments, as well as other contractual arrangements that have the potential to be economically
significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic
interests is a matter that requires the exercise of professional judgment.
Certain of our VIEs have redeemable noncontrolling interests that are subject to classification outside of permanent
equity on the Company's Consolidated Balance Sheet. The redeemable noncontrolling interests are reflected using the
redemption method as of the balance sheet date. Redeemable noncontrolling interest adjustments to the redemption values are
reflected in retained earnings. The adjustment of redemption value at the period end that reflects a redemption value in excess
of fair value is included as an adjustment to net income attributable to Equifax stockholders for the purposes of the calculation
of earnings per share. None of the current period adjustments reflect a redemption in excess of fair value. Additionally, due to
the immaterial balance of the redeemable noncontrolling interest, we have elected to maintain the noncontrolling interest in
permanent equity, rather than temporary equity, within our Consolidated Balance Sheet.
Change in Accounting Principle. In November 2015, the FASB issued ASU 2015-17 "Income Taxes (Topic 740):
Balance Sheet Classification of Deferred Taxes". The amendments in this update require that deferred tax liabilities and assets
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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