Vistaprint 2009 Annual Report Download - page 86

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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)
3. Fair Value of Financial Instruments
Carrying amounts of financial instruments held by the Company, which include cash equivalents,
marketable securities, accounts receivable, accounts payable, debt and accrued expenses
approximate fair value due to the short period of time to maturity of those instruments.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”),
which is effective for fiscal years beginning after November 15, 2007. The Company adopted SFAS
157 as of July 1, 2008. As permitted by FASB Staff Position (“FSP”) No. SFAS 157-2, Effective Date of
FASB Statement No. 157 (“FSP 157-2”), the Company elected to defer the adoption of SFAS 157 for
all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis, until fiscal year 2010, the Company’s first fiscal
year beginning after November 15, 2008. There was no cumulative effect of adoption related to SFAS
157 and the adoption did not have an impact on the Company’s financial position, results of operations,
or cash flows. The adoption of SFAS 157 for non-financial assets and liabilities will impact future
evaluations of impairment of long-lived assets. The Company does not believe that the adoption of this
standard for non-financial assets and non-financial liabilities will have a material impact on its
consolidated financial statements.
SFAS 157 establishes a three-level valuation hierarchy for measuring fair value and expands
financial statement disclosures about fair value measurements. The valuation hierarchy is based upon
the transparency of inputs to the valuation of an asset or liability as of the measurement date. The
three levels are defined as follows:
‰Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical
assets or liabilities in active markets.
‰Level 2: Inputs to the valuation methodology include quoted prices for similar assets and
liabilities in active markets, and inputs that are observable for the asset or liability, either
directly or indirectly, for substantially the full term of the financial instrument.
‰Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest
level of input that is significant to the fair value measurement. The Company measures the following
financial assets at fair value on a recurring basis.
The fair value of these financial assets was determined using the following inputs at June 30,
2009:
Total
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Cash and cash equivalents.............. $133,988 $133,988 $— $ —
Long-term investments (1) .............. 760 — — 760
Total assets recorded at fair value ....... $134,748 $133,988 $— $760
(1) Long-term investments consist of an auction rate security.
80