Vistaprint 2015 Annual Report Download - page 72

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In February 2015, the Financial Accounting Standards Board issued Accounting Standards Update No.
2015-02,"Consolidation (Topic 810): Amendments to the Consolidation Analysis," (ASU 2015-02) which places more
emphasis in the consolidation evaluation on variable interests other than fee arrangements such as principal
investment risk (for example, debt or equity interests), guarantees of the value of the assets or liabilities of the VIE,
written put options on the assets of the VIE, or similar obligations. The new standard is effective for us on July 1,
2016. The standard permits early adoption and the use of a modified retrospective approach by recording a
cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. We are currently evaluating
the effect ASU 2015-02 will have on our consolidated financial statements but do not expect it to have a material
impact.
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No.
2014-09,"Revenue from Contracts with Customers," (ASU 2014-09) which requires an entity to recognize the
amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.
This guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.
The FASB has elected to defer the effective date to fiscal years beginning after December 15, 2017, which would
result in an effective date for us of July 1, 2018, with early application permitted to one year earlier. The standard
permits the use of either the retrospective or cumulative catch-up transition method. We are currently evaluating the
adoption method and effect that ASU 2014-09 will have on our consolidated financial statements but do not expect
it to have a material impact.
3. Fair Value Measurements
The following table summarizes our investments in available-for-sale securities:
June 30, 2015
Amortized Cost
Basis Unrealized gain Estimated Fair Value
Available-for-sale securities
Plaza Create Co. Ltd. common shares (1) . . . . . . . . . . . . . . . . . . . . . $ 3,939 $ 2,971 $ 6,910
Total investments in available-for-sale securities . . . . . . . . . . . . . . . . $ 3,939 $ 2,971 $ 6,910
June 30, 2014
Amortized Cost
Basis Unrealized gain Estimated Fair Value
Available-for-sale securities
Plaza Create Co. Ltd. common shares (1) . . . . . . . . . . . . . . . . . . . . . $ 4,611 $ 9,246 $ 13,857
Total investments in available-for-sale securities . . . . . . . . . . . . . . . . $ 4,611 $ 9,246 $ 13,857
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(1) On February 28, 2014, we purchased shares in our publicly traded Japanese joint venture partner. Refer to Note 15 for further discussion of
the separate joint business arrangement.
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 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, quoted prices for identical or similar assets in markets that are not active 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.