Vistaprint 2009 Annual Report Download - page 81

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VISTAPRINT LIMITED
(predecessor to Vistaprint N.V.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2009, 2008 and 2007
(in thousands, except share and per share data)
upon final settlement, less the estimated fair value of equipment to be re-deployed or resold to a third
party. During fiscal year 2009, the Company recorded $589 additional impairment charge for
equipment previously expected to be re-deployed. The impairment charges of $589 and $876 are
included in cost of revenue in the accompanying consolidated statements of income for the fiscal years
ended June 30, 2009 and 2007, respectively.
In fiscal year 2009, the Company recorded an impairment charge on long-lived assets of $742.
The impairment charge has been included in technology and development expense in the
accompanying consolidated statements of income for the year ended June 30, 2009.
Revenue Recognition
The Company generates revenue primarily from the sale and shipping of customized
manufactured products, as well as providing electronic services, including creative design services,
website design and hosting, email marketing services and order referral fees. The Company
recognizes revenue arising from sales of products and services when it is realized or realizable and
earned. The Company considers revenue realized or realizable and earned when it has persuasive
evidence of an arrangement, the product has been shipped or service rendered with no significant
post-delivery obligations on the Company’s part, the net sales price is fixed or determinable and
collectibility is reasonably assured. Revenue is recognized net of discounts the Company offers to its
customers as part of advertising campaigns. A reserve for sales returns and allowances is recorded
based on historical experience or specific identification of an event necessitating a reserve.
Shipping, handling and processing costs billed to customers are included in revenue and the
related costs are included in cost of revenue. Sales and purchases in countries which are subject to
Value Added Tax (“VAT”) are recorded net of VAT collected and paid as the Company acts as an
agent for the government.
Advertising Expense
Advertising expense for the years ended June 30, 2009, 2008 and 2007 was $95,378, $73,699
and $47,147, respectively and is included in marketing and selling expense.
Research and Development Expense
Research and development costs are expensed as incurred. Research and development
expense for the years ended June 30, 2009, 2008 and 2007 was $7,069, $6,144 and $3,426,
respectively and is included in technology and development expense.
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 is composed of net income, unrealized gains and losses on
75
Form 10-K