Visa 2010 Annual Report Download - page 93
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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2010
(in millions, except as noted)
Reserve Primary Fund. After the Reserve Primary Fund, or the Fund, was unable to honor the Company's request for a full redemption of its investment
in 2008, the Company began accounting for its investment in the Fund under the cost method, and considered it a Level 3 asset for which a market price is not
readily determinable. The fair value was estimated by discounting the Company's pro-rata ownership of the Fund's underlying investment holdings based
upon an estimate of inherent risk, resulting in an impairment charge of $29 million in fiscal 2008. During fiscal 2009 and 2010, the Company substantially
received its remaining pro-rata ownership in the Fund, resulting in the recognition of a pre-tax gain of $20 million in investment income, net during fiscal
2010, for amounts received in excess of the carrying value. See Note 7—Prepaid Expenses and Other Assets and Note 22—Legal Matters for additional
information regarding this asset.
Long-lived assets such as goodwill, finite-lived intangible assets, and property, equipment and technology are considered non-financial assets. The
Company does not have any significant non-financial liabilities. During fiscal 2010 and at September 30, 2010, there was no indication that the Company's
long-lived assets were impaired. Indefinite-lived intangible assets consist of Visa's tradename, customer relationships, and Visa Europe franchise right
acquired in the October 2007 reorganization. The Company completed its annual impairment review of its indefinite-lived assets as of July 1, 2010 and
concluded there was no impairment.
Available-for-sale investments
Available-for-sale investment securities, which are recorded at fair value, consist of the types of securities presented below. The amortized cost,
unrealized gains and losses, and fair value of available-for-sale securities are as follows:
Available-For-Sale
(in millions)
Amortized
Cost
Gross Unrealized Fair
Value Gains Losses
September 30, 2010:
Debt securities:
U.S. government-sponsored agency debt securities $ 130 $ 5 $ — $ 135
Auction rate securities 13 — — 13
Total $ 143 $ 5 $ — $ 148
Less: current portion of available-for-sale securities (124)
Long-term available-for-sale securities $ 24
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