Visa 2009 Annual Report Download - page 55

Table of Contents
goodwill. Management relies on a number of factors when completing impairment assessment including a review of discounted future cash flows, business
plans and use of present value techniques. No impairment of our intangible assets or goodwill exists as of our July 1, 2009 annual assessment, and no events
or circumstances indicate that impairment may exist thereafter as reflected by the overall performance of our business and market capitalization among other
factors.
Impact if Actual Results Differ from Assumptions. 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, 2009.
Legal and Regulatory Matters
Critical Estimates. We are currently involved in various claims and legal proceedings, the outcomes of which are not within our complete control or
may not be known for prolonged periods of time. Management is required to assess the probability of loss and amount of such loss, if any, in preparing our
financial statements.
Assumptions and Judgment. We evaluate the likelihood of a potential loss from any claim or legal proceeding to which we are a party. We record a
liability for claims and legal proceedings when a loss is considered probable and the amount can be reasonably estimated. Significant judgment may be
required in both the determination of probability and whether an exposure is reasonably estimable.
Our judgments are subjective based on the status of the legal or regulatory proceedings, the merits of our defenses and consultation with in-house and
outside legal counsel. As additional information becomes available, we reassess the potential liability related to pending claims and litigation and may revise
our estimates.
Impact if Actual Results Differ from Assumptions. Due to the inherent uncertainties of the legal and regulatory process in the multiple jurisdictions in
which we operate, our judgments may be materially different than the actual outcomes, which could have material adverse effects on our business, financial
condition and results of operations.
Income Taxes
Critical Estimates. In calculating our effective tax rate, we make judgments regarding certain tax positions, including the timing and amount of
deductions and allocations of income among various tax jurisdictions.
Assumptions and Judgment. We have various tax filing positions with regard to the timing and amount of deductions and credits, the establishment of
reserves for audit matters and the allocation of income among various tax jurisdictions. We are also required to inventory, evaluate and measure all uncertain
tax positions taken or to be taken on tax returns, and to record liabilities for the amount of such positions that may not be sustained, or may only partially be
sustained, upon examination by the relevant taxing authorities.
Impact if Actual Results Differ from Assumptions. Although we believe that our estimates and judgments are reasonable, actual results may differ from
these estimates. Some or all of these judgments are subject to review by the taxing authorities, including our current and deferred tax benefits associated with
the settlement of the American Express litigation and the Discover litigation and other matters. See Note 21—Legal Matters to our consolidated financial
statements. If one or more of the taxing authorities were to successfully challenge our right to realize some or all of the tax benefit we have recorded, and we
were unable to realize this benefit, it could have a material and adverse effect on our financial results and cash flows.
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