Vistaprint 2011 Annual Report Download - page 69

Download and view the complete annual report

Please find page 69 of the 2011 Vistaprint annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 139

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139

Concentrations of Credit Risk
We monitor the creditworthiness of our customers to which we grant credit terms in the normal
course of business. We had one customer that represented 26% of our total accounts receivable at
June 30, 2011. All balances related to this one customer have been collected as of the date of this filing.
We maintain an allowance for doubtful accounts for potential credit losses based upon specific
customer accounts and historical trends, and such losses to date in the aggregate have not materially
exceeded our expectations.
Recently Adopted Accounting Pronouncements
Effective July 1, 2010, we adopted Accounting Standards Update (“ASU”) 2009-13 Multiple-
Deliverable Revenue Arrangements, which amends ASC Subtopic 650-25 Revenue Recognition —
Multiple-Element Arrangements to eliminate the requirement that all undelivered elements have
vendor-specific objective evidence (“VSOE”) or third-party evidence (“TPE”) before an entity can
recognize the portion of an overall arrangement fee that is attributable to items that already have been
delivered. In the absence of VSOE or TPE of the standalone selling price for one or more delivered or
undelivered elements in a multiple-element arrangement, entities will be required to estimate the
selling prices of those elements. The overall arrangement fee will be allocated to each element (both
delivered and undelivered items) based on their relative selling prices, regardless of whether those
selling prices are evidenced by VSOE or TPE or are based on the entity’s estimated selling price.
Additionally, the new guidance will require entities to disclose more information about their multiple-
element revenue arrangements. The adoption of this ASU did not have a material impact on our
consolidated financial statements.
Recently Issued Accounting Pronouncements
In May 2011, the Financial Accounting Standards Board issued ASU 2011-04 Amendments to
Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS
(“ASU 2011-04”), which is intended to result in convergence between U.S. GAAP and International
Financial Reporting Standards requirements for measurement of, and disclosures about, fair value.
ASU 2011-04 clarifies or changes certain fair value measurement principles and enhances the
disclosure requirements particularly for Level 3 fair value measurements. The new guidance is
effective for our third quarter of the fiscal year ending June 30, 2012, and we do not expect its
adoption to have a material effect on our financial position or results of operations.
In June 2011, the Financial Accounting Standards Board issued ASU 2011-05 Presentation of
Comprehensive Income, which makes the presentation of items within other comprehensive income
(“OCI”) more prominent. The new standard will require companies to present items of net income,
items of OCI and total comprehensive income in one continuous statement or two separate
consecutive statements, and companies will no longer be allowed to present items of OCI in the
statement of shareholders’ equity. Reclassification adjustments between OCI and net income will be
presented separately on the face of the financial statements. The new guidance is effective for our
fiscal year ending June 30, 2013, and we do not expect its adoption to have a material effect on our
financial position or results of operations.
3. Fair Value Measurements
We use a three-level valuation hierarchy for measuring fair value and include detailed financial
statement disclosures about fair value measurements. The valuation hierarchy is based upon the
66