Vistaprint 2008 Annual Report Download - page 80

VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2008, 2007 and 2006
(in thousands, except share and per share data)
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 159”). SFAS
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 159 is
effective for fiscal years beginning after November 15, 2007. The Company does not believe that the
adoption of this standard will have a material impact on its consolidated financial statements.
In December 2007, the FASB issued SFAS No. 141(R) Business Combinations (“SFAS 141(R)”).
SFAS 141(R) states that all business combinations (whether full, partial or step acquisitions) will result
in all assets and liabilities of an acquired business being recorded at their fair values. Certain forms of
contingent consideration and certain acquired contingencies will also be recorded at fair value at the
acquisition date. SFAS 141(R) also requires acquisition costs be expensed as incurred and
restructuring costs will be expensed in periods after the acquisition date in accordance with the
requirements of FASB Statement 146, Accounting for Costs of Exit or Disposal Activities. SFAS 141(R)
is effective for financial statements issued for fiscal years beginning after December 15, 2008. Earlier
adoption is prohibited. The Company does not believe that the adoption of this standard will have a
material impact on its consolidated financial statements.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements-an amendment of Accounting Research Bulletin No. 51 (“SFAS 160”). SFAS 160
requires a company to clearly identify and present ownership interests in subsidiaries held by parties
other than the company in the consolidated financial statements within the equity section but separate
from the company’s equity. It also requires the amount of consolidated net income attributable to the
parent and to the noncontrolling interest be clearly identified and presented on the face of the
consolidated statement of income; changes in ownership interest be accounted for similarly, as equity
transactions; and when a subsidiary is deconsolidated, any retained noncontrolling equity investment in
the former subsidiary and the gain or loss on the deconsolidation of the subsidiary be measured at fair
value. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on
or after December 15, 2008. Earlier adoption is prohibited. The Company does not believe that the
adoption of this standard will have a material impact 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
President and CEO of the Company is the Chairman of the Board of Mod-Pac. The Company
amended the Mod-Pac printing supply agreement in April 2005 to permit the Company to manufacture
products destined for North American customers in exchange for the payment of a fee to Mod-Pac for
each unit shipped from our Canadian facility. The new supply agreement expired on August 30, 2005
and the Company has not placed any orders with Mod-Pac since that date. In the year ended June 30,
2006, the Company purchased goods and services from Mod-Pac of $3,257.
76