Visa 2015 Annual Report Download - page 57

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Data processing revenues are earned for authorization, clearing, settlement, network access and
other maintenance and support services that facilitate transaction and information processing among
our clients globally and with Visa Europe. Data processing revenues are recognized in the same period
the related transactions occur or services are rendered.
International transaction revenues are earned for cross-border transaction processing and
currency conversion activities. Cross-border transactions arise when the country of origin of the issuer
is different from that of the merchant. International transaction revenues are primarily generated by
cross-border payments and cash volume.
Other revenues consist mainly of license fees for use of the Visa brand, revenues earned from
Visa Europe in connection with the Visa Europe Framework Agreement, fees from account holder
services, certification and licensing, and other activities related to our acquired entities. Other revenues
also include optional service or product enhancements, such as extended account holder protection
and concierge services.
Client incentives consist of long-term contracts with financial institution clients and other business
partners for various programs designed to build payments volume, increase Visa-branded card and
product acceptance and win merchant routing transactions over our network. These incentives are
primarily accounted for as reductions to operating revenues.
Operating Expenses
Personnel includes salaries, employee benefits, incentive compensation, share-based
compensation and contractor expense.
Marketing includes expenses associated with advertising and marketing campaigns, sponsorships
and other related promotions of the Visa brand.
Network and processing mainly represents expenses for the operation of our processing network,
including maintenance, equipment rental and fees for other data processing services.
Professional fees mainly consist of fees for legal, consulting and other professional services.
Depreciation and amortization includes depreciation expense for property and equipment, as well
as amortization of purchased and internally developed software. Also included in this amount is
amortization of finite-lived intangible assets primarily obtained through acquisitions.
General and administrative mainly consists of facilities costs, travel activities, foreign exchange
gains and losses and other corporate expenses in support of our business.
Litigation provision is an estimate of litigation expense and is based on management’s
understanding of our litigation profile, the specifics of the cases, advice of counsel to the extent
appropriate and management’s best estimate of incurred loss as of the balance sheet date.
Non-operating (Expense) Income
Non-operating (expense) income mainly includes the change in the fair value of the Visa Europe
put option, income, gains and losses earned on investments, and accrued interest and penalties
related to reserves for uncertain tax positions.
44