Vistaprint 2007 Annual Report Download - page 73

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VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2007, 2006 and 2005
(in thousands, except share and per share data)
Research and development costs are expensed as incurred. Research and development
expenses for the years ended June 30, 2007, 2006 and 2005 were $3,426, $1,519 and $678,
respectively. Costs of information technology operations are expensed in the period in which they are
incurred.
Long-Lived Assets and Intangible Assets
In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, the Company continually evaluates whether events or circumstances have occurred that
indicate that the estimated remaining useful life of its long-lived assets, including intangible assets,
may warrant revision or that the carrying value of these assets may be impaired. The Company
evaluates the realizability of its long-lived assets based on profitability and cash flow expectations for
the related asset. Any write-downs are treated as permanent reductions in the carrying amount of the
assets. Based on this evaluation, the Company believes that, as of each of the balance sheet dates
presented, none of the Company’s long-lived assets, including intangible assets, were impaired.
In March 2007, the Company recorded an impairment charge of $1,013 relating to a project
undertaken in the Windsor facility to automate a portion of the workflow of printed product which was
no longer considered viable. In June 2007, upon final settlement with the vendor, the Company
reduced the impairment loss by $137. The impairment charge was determined to be the total cost of
the project upon final settlement, less the fair value of equipment to be re-deployed or resold to a third
party, and is included in cost of revenue in the accompanying consolidated statements of operations.
Comprehensive Income
SFAS No. 130, Reporting Comprehensive Income, establishes standards for reporting and
displaying comprehensive income and comprehensive loss and its components in the consolidated
financial statements. Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances from non-owner
sources. Comprehensive income (loss) is composed of net income (loss), unrealized gains and losses
on marketable securities and cumulative foreign currency translation adjustments, which are disclosed
in the accompanying consolidated statements of redeemable convertible preferred shares and
shareholders’ equity (deficit).
The components of accumulated other comprehensive income were as follows (in thousands):
June 30,
2007 2006
Unrealized loss on marketable securities .......................................... $ (13) $ (52)
Cumulative translation adjustments ............................................... 1,935 717
Accumulated other comprehensive income .................................... $1,922 $665
69
Form 10-K