Summary
This Form 8-K filing from Visa Inc. on November 15, 2010, primarily details changes in accounting presentation and the non-recurrence of certain revenues and expenses, effective fiscal year 2011. The company is shifting its presentation of non-Visa transaction pass-through revenues and expenses from a 'gross' basis to a 'net' basis. This change in income statement presentation will not impact operating income or net income, as the related revenues and expenses fully offset each other. Furthermore, Visa is reporting that certain revenues and expenses associated with the Visa Extras rewards platform will not recur in fiscal year 2011 due to a transition to direct issuer billing by an outside service provider and a large issuer's departure from the platform. This will affect 'other revenues' and 'advertising, marketing and promotion expenses,' but again, these amounts are expected to fully offset each other and thus will not impact Visa's net income or operating income.
Key Highlights
- 1Visa Inc. is changing its income statement presentation for non-Visa transaction pass-through revenues and expenses from 'gross' to 'net' starting fiscal year 2011.
- 2This accounting presentation change is a reclassification and does not impact Visa's operating or net income as revenues and expenses fully offset.
- 3The company reported $140 million in non-Visa transaction pass-through amounts in fiscal year 2010, spread across four quarters.
- 4Certain Visa Extras rewards platform revenues and expenses totaling $89 million will not recur in fiscal year 2011.
- 5The non-recurrence of Visa Extras related items is due to a transition to direct issuer billing and a large issuer leaving the platform.
- 6These Visa Extras related changes are also expected to have no impact on Visa's operating or net income.
- 7The filing clarifies that the core profitability of Visa remains unaffected by these presentation and contractual adjustments.