Visa 2010 Annual Report Download - page 77

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2010
(in millions, except as noted)
Note 1—Summary of Significant Accounting Policies
Organization. Visa Inc. ("Visa" or the "Company") is a global payments technology company that connects consumers, businesses, banks and
governments around the world, enabling them to use digital currency instead of cash and checks. Visa and its wholly-owned consolidated subsidiaries,
including Visa U.S.A. Inc. ("Visa U.S.A."), Visa International Service Association ("Visa International"), Visa Worldwide Pte. Limited ("VWPL"), Visa
Canada Corporation ("Visa Canada"), Inovant LLC ("Inovant") and CyberSource Corporation ("CyberSource"), operate the world's largest retail electronic
payments network. The Company provides financial institutions with payment processing platforms that encompass consumer credit, debit, prepaid and
commercial payments, and facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers,
businesses and government entities. The Company does not issue cards, set fees, or determine the interest rates consumers will be charged on Visa-branded
cards, which are the independent responsibility of the Company's issuing clients. In order to respond to industry dynamics and enhance Visa's ability to
compete, Visa undertook a reorganization in October 2007, and in March 2008 the Company completed its initial public offering, or the IPO. See Note 2—The
Reorganization. In July 2010, the Company completed its acquisition of CyberSource in order to expand the Company's online payment, fraud, and security
management capabilities and to accelerate its growth in eCommerce. The results of CyberSource are included in the Company's results from the acquisition
date. See Note 6—CyberSource Acquisition.
Consolidation and basis of presentation. The consolidated financial statements include the accounts of Visa Inc. and its consolidated entities and are
presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company consolidates all entities that
are controlled by ownership of a majority voting interest as well as variable interest entities for which the Company is the primary beneficiary. Non-
controlling interests are reported as a component of equity. All significant intercompany accounts and transactions are eliminated in consolidation. Certain
reclassifications, not affecting net income, have been made to prior period information to conform to the current period presentation format, including
reclassification of $85 million and $115 million of contractor expense, which was previously reported in professional and consulting fees, to personnel for
fiscal years 2009 and 2008, respectively.
The Company has one reportable segment, "Payment Services". The Company's activities are interrelated and each activity is dependent upon and
supportive of the other. Accordingly, all significant operating decisions are based on analysis of Visa Inc. as a single global business.
Use of estimates. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and
assumptions about future events. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Future actual results
could materially differ from these estimates. The use of estimates in specific accounting policies is described further below as appropriate.
Cash and cash equivalents. Cash and cash equivalents include cash and certain highly liquid investments with original maturities of 90 days or less
from the date of purchase. Cash equivalents are recorded at cost, which approximates fair value.
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