Visa 2013 Annual Report Download - page 94

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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2013
ratios of comparable public companies. The Company recognized a $15 million other-than-temporary
impairment loss related to these investments during fiscal 2013, compared with a $2 million impairment
loss recognized during fiscal 2012 and no impairment charges during fiscal 2011. At September 30,
2013 and 2012, these investments totaled $30 million and $86 million, respectively. These assets are
classified in other assets on the consolidated balance sheets. See Note 5—Prepaid Expenses and
Other Assets.
Due to a change in the Company’s relationship with one of its investees during fiscal 2013, the
Company reclassified equity securities previously accounted for as an equity method investment, with
a carrying value of $12 million, to long-term available-for-sale investment securities. The fair value of
this investment at September 30, 2013 was $99 million, resulting in the recognition of a pre-tax
unrealized gain of $87 million in other comprehensive income.
Non-financial assets and liabilities. Long-lived assets such as goodwill, indefinite-lived intangible
assets, finite-lived intangible assets, and property, equipment and technology are considered non-
financial assets. The Company does not have any non-financial liabilities measured at fair value on a
non-recurring basis. Finite-lived intangible assets primarily consist of customer relationships,
tradenames, and reseller relationships, all of which were obtained through acquisitions. See Note 7—
Intangible Assets, Net.
If the Company were required to perform a quantitative assessment for impairment testing of
goodwill and indefinite-lived intangible assets, the fair values would generally be estimated using an
income approach. As the assumptions employed to measure these assets on a non-recurring basis are
based on management’s judgment using internal and external data, these fair value determinations are
classified as Level 3 in the fair value hierarchy. The Company completed its annual impairment review
of its indefinite-lived intangible assets and goodwill as of February 1, 2013, and concluded that there
was no impairment. No recent events or changes in circumstances indicate that impairment existed at
September 30, 2013. See Note 1—Summary of Significant Accounting Policies.
Other Financial Instruments not Measured at Fair Value
Certain financial instruments are not measured at fair value on the Company’s consolidated
balance sheet but require disclosure of their fair values, including cash, settlement receivable and
payable, and customer collateral. The estimated fair value of such instruments at September 30, 2013,
approximates their carrying value due to their generally short maturities.
Investments
Trading Investment Securities
Trading investment securities include mutual fund equity security investments related to various
employee compensation and benefit plans. Trading activity in these investments is at the direction of
the Company’s employees. These investments are held in trust and are not available for the
Company’s operational or liquidity needs. Interest and dividend income and changes in fair value are
recorded in non-operating income, and offset in personnel expense on the consolidated statements of
operations. As of September 30, 2013 and 2012, trading investment securities totaled $75 million and
$66 million, respectively.
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