Green Dot 2011 Annual Report Download - page 45

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35
Overdrafts due to maintenance fee assessments comprised approximately 91% of our total overdrawn account
balances due from cardholders for the year ended December 31, 2011. We charge our GPR cardholder accounts
maintenance fees on a monthly basis pursuant to the terms and conditions in the applicable cardholder agreements.
Although cardholder accounts become inactive or overdrawn, we continue to provide cardholders the ongoing
functionality of our GPR cards, which allows them to reload and use their cards at any time. As a result, we continue
to assess a maintenance fee until a cardholder account becomes overdrawn by an amount equal to two maintenance
fees, currently $6.00 for the Walmart MoneyCard and $11.90 for our Green Dot-branded GPR cards. We recognize
the fees ratably over the month for which they are assessed, net of the related provision for uncollectible overdrawn
accounts, as a component of card revenues and other fees in our consolidated statements of operations.
We include our provision for uncollectible overdrawn accounts related to purchase transactions in other general
and administrative expenses in our consolidated statements of operations.
Our recovery rates may change in the future in response to factors such as the pricing of reloads and new cards
and the availability of substitute products.
Employee Stock-Based Compensation
We record employee stock-based compensation expense using the fair value method of accounting. For stock
options and stock purchases under our employee stock purchase plan, we base compensation expense on fair values
estimated at the grant date using the Black-Scholes option-pricing model. For stock awards, including restricted stock
units, we base compensation expense on the fair value of our common stock at the grant date. We recognize
compensation expense for awards with only service conditions that have graded vesting schedules on a straight-line
basis over the vesting period of the award. Vesting is based upon continued service to our company.
We measure the fair value of equity instruments issued to non-employees as of the earlier of the date a performance
commitment has been reached by the counterparty or the date performance is completed by the counterparty. We
determine the fair value using the Black-Scholes option-pricing model or the fair value of our Class A or Class B common
stock, as applicable, and recognize related expense in the same periods that the goods or services are received.
Recent Accounting Pronouncements
In June 2011, the FASB issued ASU 2011-05, Comprehensive Income: Presentation of Comprehensive Income,
which requires an entity to present the total of comprehensive income, the components of net income, and the
components of other comprehensive income either in a single continuous statement of comprehensive income or in
two separate but consecutive statements. It eliminates the option to present components of other comprehensive
income as part of the statement of changes in stockholders' equity. The ASU does not change the items which must
be reported in other comprehensive income, how such items are measured or when they must be reclassified to net
income. This ASU is effective for interim and annual periods beginning after December 15, 2011. Our adoption of this
ASU is not expected to have a material impact on our consolidated financial statements.
In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair
Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which converges common fair value
measurement and disclosure requirements in accordance with GAAP and IFRS. This ASU is effective for interim and
annual periods beginning after December 15, 2011. Our adoption of this ASU is not expected to have a material impact
on our consolidated financial statements.
In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements, which
requires additional information in the roll-forward of Level 3 assets and liabilities, including the presentation of purchases,
sales, issuances and settlements on a gross basis. This ASU impacts disclosures only. We adopted this ASU in the
first quarter of 2011.