Vistaprint 2009 Annual Report Download - page 59

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underlying equity security. In determining the amount of expense to be recorded, we also are required
to estimate forfeiture rates for awards, based on the probability that employees will complete the
required service period. If actual forfeitures differ significantly from our estimates, our results could be
materially affected.
Litigation and Contingencies. We are subject to various loss contingencies arising in the
ordinary course of business. We consider the likelihood of loss or impairment of an asset or the
incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining
loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has
been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. We
regularly evaluate current information available to us to determine whether such accruals should be
adjusted. Specific information regarding litigation we are involved in is included under “Item 3. Legal
Proceedings.”
Recent Accounting Pronouncements
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. We do not believe that the adoption of this standard will have a material impact
on our 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. We do not believe that the adoption of this
standard will have a material impact on our consolidated financial statements.
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework
for selecting the principles to be used in the preparation of a company’s financial statements that are
presented in conformity with generally accepted accounting principles in the United States. Any effect
of applying the provisions of this SFAS 162 will be reported as a change in accounting principle. We do
not believe that the adoption of this standard will have a material impact on our consolidated financial
statements.
In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R)
(“SFAS 167”), which is effective for fiscal years beginning on or after December 15, 2008. This
Statement amends FIN 46(R), Consolidation of Variable Interest Entities an interpretation of ARB
No. 51, to require revised evaluations of whether entities represent variable interest entities, ongoing
assessments of control over such entities, and additional disclosures for variable interests. We do not
believe the adoption of this pronouncement will not have a material impact on our financial statements.
Form 10-K
53