Visa 2007 Annual Report Download - page 95

Table of Contents
Critical Estimates Assumptions and Judgment
Impact if Actual Results
Differ from Assumptions
on matching the duration of corporate bond pools to the expected
pension payment stream. The discount rate enables Visa U.S.A. to
calculate the present value of the expected future cash flows on the
measurement date. A lower discount rate increases the present value of
benefit obligations and increases pension expense.
The expected rate of return on plan assets is based on current and
expected asset allocation, as well as the long-term historical risks and
returns associated with each asset class within the plan portfolio. A
lower expected rate of return on plan assets increases pension cost.
Legal Matters
Visa U.S.A. is a party to legal proceedings with respect to a variety of
matters, the outcomes of which are not within our complete control or
may not be known for prolonged periods of time. Except as described in
Note 20—Legal Matters to the Visa U.S.A. fiscal 2007 consolidated
financial statements, Visa U.S.A. does not believe that any legal
proceeding to which Visa U.S.A. is a party would have a material
adverse impact on Visa U.S.A.'s business.
Management is required to assess the probability of loss and amount of
such loss, if any, in preparing our financial statements.
Visa U.S.A. evaluates the likelihood of a potential
loss from any claim or legal proceedings to which
Visa U.S.A. is party in accordance with SFAS No. 5,
"Accounting for Contingencies" (SFAS 5). Visa
U.S.A. records a liability in its consolidated financial
statements for claims and legal and regulatory
proceedings when a loss is known or considered
probable and the amount can be reasonably estimated.
In most cases, significant judgment is required in both
the determination of probability and the determination
as to whether an exposure is reasonably estimable.
Visa U.S.A.'s judgments are subjective based on the
status of the legal or regulatory proceedings, the
merits of Visa U.S.A.'s defenses and consultation with
in-house and outside legal counsel.
Due to the inherent
uncertainties of the legal and
regulatory process in the
multiple jurisdictions in
which Visa U.S.A. operates,
its judgments may be
materially different than the
actual outcomes, which
could have material adverse
affects on Visa U.S.A.'s
business, financial condition
and results of operations.
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