Go Daddy 2015 Annual Report Download - page 165

Table of Contents
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As of December 31, 2015, our accrual for estimated indirect tax liabilities was $7.1 million, reflecting our best estimate of
the probable liability, based on an analysis of our business activities, revenues subject to indirect taxes and applicable regulations
in the jurisdictions in which we conduct business. We continually evaluate those jurisdictions in which nexus exists and believe
our accrual for estimated indirect tax liabilities is reasonable; however, the final determination of indirect tax audits and any
related litigation could be materially different than the amounts we have established for indirect tax contingencies. Due to the
complexity and uncertainty surrounding indirect tax laws, we believe it is reasonably possible we have incurred additional losses
related to indirect taxes; however, we are not able to estimate a range of the loss at this time.
See Note 10 to our consolidated financial statements for additional information regarding indirect taxes.
Loss Contingencies
We are subject to the possibility of various loss contingencies arising from uncertain and unresolved matters in the ordinary
course of business and from events or actions by others having the potential to result in a future loss. Such contingencies may
include, but are not limited to, intellectual property claims, labor and employment claims, breach of contract claims, regulatory
proceedings, product service level commitments and losses resulting from other events and developments. We consider the
likelihood of loss, the impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the
amount of loss, in determining loss contingencies.
When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the
ultimate loss. When there appears to be a range of possible costs with equal likelihood, liabilities are based on the low-end of such
range. However, the likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a
meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential
effect of future events and decisions by third parties impacting the ultimate resolution of the contingency. It is also not uncommon
for such matters to be resolved over many years, during which time relevant developments and new information must be
continuously evaluated to determine both the likelihood of potential loss and whether it is possible to reasonably estimate a range
of possible loss. When a loss is probable but a reasonable estimate cannot be made, disclosure is provided.
Disclosure is also provided when it is reasonably possible a loss will be incurred, or when it is reasonably possible the
amount of a loss will exceed the recorded amounts. We regularly review all contingencies to determine whether the likelihood of
loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made. As discussed above,
development of a meaningful estimate of loss, or a range of potential loss, is complex when the outcome is directly dependent on
negotiations with, or decisions by, third parties such as regulatory agencies, court systems in various jurisdictions and other
interested parties. Such factors bear directly on whether it is possible to reasonably estimate a range of potential loss and
boundaries of high and low estimates.
See Note 10 to our consolidated financial statements for additional information regarding loss contingencies.
Recent Accounting Pronouncements
See Note 2 to our consolidated financial statements for information regarding recent accounting pronouncements.
Part IV.
Item 15. Exhibits, Financial Statement Schedules
Exhibits
See the Exhibit Index immediately following the signature page of this Annual Report on Form 10-K.