Visa 2008 Annual Report Download - page 89

Table of Contents
Critical Estimates Assumptions and Judgment
Impact if Actual Results
Differ from Assumptions
assuming various possible exercise decisions that Visa Europe could
make, including the possibility it will never exercise its option, under
different economic conditions in the future. Using this approach, the
estimated fair value is approximately $346 million at September 30, 2008
and is included in other liabilities on the Visa Inc. consolidated balance
sheet at September 30, 2008.
While this amount represents the fair value of the put option at
September 30, 2008, it does not represent the actual purchase price that
we may be required to pay if the option was exercised, which would
likely be significantly in excess of this amount.
Fair Value—Goodwill and Intangibles
The purchase method of accounting for business combinations and
associated impairment assessment requires the use of significant
estimates and assumptions. We are required to estimate the fair value and
useful lives of assets acquired and liabilities assumed. We are required to
assess assets acquired and goodwill for impairment subsequently.
Valuation of assets and liabilities assumed in
business combinations, including goodwill and
intangible assets require the use of management's
judgment. These judgments can include, but are not
limited to, the cash flows that an asset is expected
to generate in the future, the appropriate weighted
average cost of capital and an appropriate discount
rate determined by our management. We believe
that the assumptions made in this regard are
comparable to those that market participants would
use in making estimates of fair value. Our
estimates are based upon assumptions believed to
be reasonable, but which are inherently uncertain
and unpredictable.
Determining the expected life of an intangible asset
requires
If actual results are not
consistent with our
assumptions and estimates, we
may be exposed to impairment
charges. The carrying value of
the goodwill and intangible
assets was $21.1 billion,
including $10.9 billion of
indefinite-lived intangible
assets at September 30, 2008.
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