Visa 2010 Annual Report Download - page 59

Table of Contents
advertising and promotional rights. In connection with these contractual commitments, Visa has an obligation to spend certain minimum amounts for
advertising and marketing promotion over the contract terms. For obligations where the individual years of spend are not specified in the contract, we
have estimated the timing of when these amounts will be spent.
(5) Includes dividend amount of $107 million as dividends were declared on October 20, 2010 and will be paid on December 7, 2010 to all holders of
record of Visa's common stock as of November 19, 2010.
(6) We have liabilities for uncertain tax positions of $443 million, net of offsetting tax benefits associated with the corresponding effects of state and
foreign income taxes. At September 30, 2010, we also accrued $58 million of interest and $10 million of penalties associated with our uncertain tax
positions. We cannot determine the range of cash payments that will be made and the timing of the cash settlements associated with our uncertain tax
positions. Therefore, no amounts related to these obligations have been included in the table.
(7) Visa granted a perpetual put option to Visa Europe, which if exercised, will require us to purchase all of the outstanding shares of capital stock of Visa
Europe from its members. Due to the perpetual nature of the instrument and the various economic conditions, which could exist when the put is
exercised, the ultimate amount and timing of Visa's obligation, if any, cannot be reliably estimated. Therefore, no amounts related to this obligation
have been included in the table. The fair value of the Visa Europe put option itself totaling $267 million at September 30, 2010 has also been excluded
from this table as it does not represent the amount or an estimate of the amount of Visa's obligation in the event of exercise. See Liquidity and Critical
Accounting Estimates sections of this Management's Discussion and Analysis and Note 3—Visa Europe to our consolidated financial statements.
(8) We evaluate the need to make contributions to our pension plan after considering the funded status of the pension plan, movements in the discount rate,
performance of the plan assets, and related tax consequences. Expected contributions to our pension plan have not been included in the table as such
amounts are dependent upon the considerations discussed above, and may result in a wide range of amounts. See Note 12—Pension, Postretirement and
Other Benefits to our consolidated financial statements.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which
requires us to make judgments, assumptions and estimates that affect the amounts reported. See Note 1—Summary of Significant Accounting Policies to our
consolidated financial statements. We have established policies and control procedures which seek to ensure that estimates and assumptions are appropriately
governed and applied consistently from period to period. However, actual results could differ from our assumptions and estimates, and such differences could
be material.
We believe that the following accounting estimates are the most critical to fully understand and evaluate our reported financial results, as they require
our most subjective or complex management judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain
and unpredictable.
Revenue Recognition—Volume and Support Incentives
Critical Estimates. We enter into incentive agreements with clients, merchants and other business partners to build payments volume and to increase
product acceptance. These incentives are generally accounted for as reductions of operating revenue or expense where an identifiable benefit can be identified.
Certain volume and support incentives are based on performance targets and are accrued systematically and rationally based upon estimates of future
performance. Other incentives are based
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