Green Dot 2015 Annual Report Download - page 74

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Note 2—Summary of Significant Accounting Policies (continued)
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which
supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to
recognize revenues when promised goods or services are transferred to customers in an amount that reflects the
consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step
process to achieve this core principle and, in doing so, more judgment and estimates may be required within the
revenue recognition process than are required under existing GAAP. Under ASU 2015-14, Revenue from Contracts
with Customers (Topic 606): Deferral of Effective Date, the revenue standard is effective for annual periods beginning
after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full
retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect
certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09
recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is permitted for
periods beginning after December 15, 2016. We are currently evaluating the impact of our pending adoption of ASU
2015-14 and ASU 2014-09 on our consolidated financial statements.
Note 3—Business Acquisitions
AccountNow, Inc.
In January 2015, we completed the acquisition of AccountNow, Inc. ("AccountNow"). We issued approximately
514,000 shares of our Class A common stock on the date of close and the remainder of the consideration in cash for
a total purchase price of approximately $78.7 million. AccountNow's results of operations are included in our
consolidated statements of operations following the acquisition date. We have not presented pro-forma results of
operations because the effect of this acquisition was not material to our financial results.
At the time of acquisition, we recorded a preliminarily estimate for the fair value of the assets acquired and liabilities
assumed based on facts and circumstances available at the time. The assets and liabilities acquired consisted of $3.3
million in cash and cash equivalents, $4.1 million in accounts and other receivables, $6.4 million in prepaid and other
assets and $12.8 million in accrued liabilities. Additionally, we recorded a preliminary estimate of goodwill and intangible
assets for $61.6 million and $16.1 million, respectively. Transaction costs associated with this acquisition were not
material.
During the fourth quarter of 2015, we recorded a purchase price adjustment of $1.2 million to increase goodwill
and reduce our deferred tax assets based on additional information not available at the time of acquisition. We may
adjust this allocation after obtaining more information regarding, among other things, asset valuations, liabilities
assumed, and revisions to preliminary estimates over the measurement period not to exceed 12 months from the date
of acquisition.
SBBT Holdings, LLC
On October 23, 2014, we completed our acquisition of SBBT Holdings, LLC ("TPG"), a provider of integrated tax
refund processing services. TPG's services are integrated into the offerings of the nation's leading tax software
companies, which enables TPG to serve approximately 25,000 independent tax preparers and accountants nationwide.
This transaction was accounted for as a business combination, and allowed us to expand into TPG's core customer
segment by adding tax refund processing services for tax filers through distribution partnerships with many of America’s
largest and best known tax preparation companies and independent tax preparers.
In connection with the acquisition, total consideration amounted to approximately $358.5 million, which included
cash, stock and contingent consideration. We financed the transaction with $204.5 million in cash, of which $150.0
million was raised from our Term Facility, as discussed in Note 10 — Note Payable, and 6.1 million shares of our Class
A common stock at a closing price of $21.86 (of which 1.1 million shares were deposited in an escrow fund to serve
as a source of payment of any indemnification obligations).
Additionally, the transaction terms include a potential $80.0 million cash earn-out payable to the former owners of
TPG based on TPG meeting certain pre-determined performance targets. The earn-out period spans from July to June
each fiscal year from 2015 to 2017. Certain performance targets must be achieved each fiscal year in order to earn a
corresponding portion of the cash earn-out. For fiscal year 2015, these performance targets were not met, and therefore
no cash earn-out payments were made.