Vistaprint 2007 Annual Report Download - page 79

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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)
New Accounting Pronouncements
In June 2006, the FASB issued FASB Interpretation, or FIN, No. 48, Accounting for Uncertainty in
Income Taxes—an interpretation of SFAS No. 109 (“FIN 48”), which clarifies when tax benefits should
be recorded in financial statements, requires certain disclosures of uncertain tax matters and provides
guidance on how any tax reserves should be classified in a balance sheet. FIN 48 is effective for fiscal
years beginning after December 15, 2006. Accordingly, the Company will be required to adopt FIN 48
in the first quarter of fiscal 2008. The Company does not believe that the adoption of this interpretation
will have a material impact on it’s Consolidated Financial Statements.
In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, Considering the
Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial
Statements (“SAB 108”), which provides guidance on quantifying and evaluating the materiality of
unrecorded prior year misstatements. The SEC staff indicates that an entity should quantify the impact
of correcting all misstatements, including both the carryover and reversing effects of prior year
misstatements, on the current year financial statements. Companies may choose to restate their
financial statements for any material misstatements arising from the application of SAB 108 or
recognize a cumulative effect adjustment within the current year opening balance in retained earnings,
with disclosure of such items. SAB 108 is effective for fiscal years ending after November 15, 2006.
The Company has concluded that the adoption of SAB 108 did not have a material impact on the
Consolidated Financial Statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”),
which defines fair value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies
under other accounting pronouncements that require or permit fair value measurements.
SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15,
2007, and interim periods within those fiscal years. The Company is currently evaluating the impact, if
any, the adoption of SFAS No. 157 will have on its consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities—Including an Amendment of FASB Statement No. 115 (“SFAS No. 159”).
SFAS No. 159 allows for the choice to measure certain financial instruments and certain other items at
fair value. This allows a company to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge accounting provisions.
SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is
currently evaluating the impact, if any, the adoption of SFAS No. 159 will have on its consolidated
financial statements.
3. Related-Party Transactions
Since September 2005, the Company has produced 100% of its customer print orders at its
internal manufacturing facilities.
Prior to May 2005, the Company purchased all of its printed materials for the fulfillment of
North American customers’ orders from Mod-Pac Corporation (“Mod-Pac”). The brother of the
President and CEO of the Company is the President and CEO of Mod-Pac, and the father of the
75
Form 10-K