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Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2014
Accounting Policies [Abstract]  
Business

Business

Imperva, Inc. (together with its subsidiaries, the “Company” or “we”) was incorporated in April 2002 in Delaware. The Company is headquartered in Redwood Shores, California and has subsidiaries located throughout the world including Israel, Asia and Europe. The Company is engaged in the development, marketing, sales, service and support of data center security solutions that protect high value applications and data assets in physical and virtual data centers.
Basis of Presentation

Basis of Presentation

The Company has prepared the accompanying unaudited Condensed Consolidated Financial Statements in accordance with Article 10 of Regulation S-X and pursuant to the rules and regulations for Form 10-Q of the Securities and Exchange Commission (the “SEC”). Pursuant to those rules and regulations, the Company has condensed or omitted certain information and footnote disclosure it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present its consolidated financial position, results of operations, and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on February 28, 2014 (the “Annual Report”).

During the three months ended March 31, 2014, we revised our business segments based upon the acquisition of the remaining shares of Incapsula, Inc. that the Company did not already own. As a result, we no longer separately report the Incapsula segment and the Company now operates in one operating, and therefore reportable segment in order to better align Incapsula with our strategic approach to the markets and customers we serve. The reclassification of historical business segment information had no impact on the Company’s basic financial statements.
Basis of Consolidation

Basis of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. On March 20, 2014, the Company acquired the remaining interest it did not previously own in its majority-owned subsidiary, Incapsula, Inc. (“Incapsula”) (Refer to Note 2). The Company separately presented the non-controlling interest on its Condensed Consolidated Balance Sheets in Total Stockholder’s Equity and in its Condensed Consolidated Statements of Operations for periods prior to such date.
Goodwill and Acquired Intangibles

Goodwill and Acquired Intangibles

Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net tangible assets acquired. Goodwill is not amortized and is reviewed at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing goodwill, the Company performs a qualitative assessment to test the reporting unit’s goodwill for impairment. Based on the Company’s qualitative assessment, if we determine that the fair value of the reporting unit is more likely than not (i.e. a likelihood of more than 50 percent) to be less than the carrying amount, the two step impairment test will be performed. The first step of the impairment test involves comparing the fair value of the reporting unit to its net book value, including goodwill. If the net book value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the Company to its net book value. In calculating the implied fair value of the Company’s goodwill, the fair value of the Company would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the Company over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value.

We review our goodwill for impairment annually, or more frequently, if facts and circumstances warrant a review. We complete our annual impairment test during the fourth quarter of each fiscal year. There was no impairment of goodwill recorded for the quarter ended March 31, 2014.

We amortize intangible assets with finite lives over their estimated useful lives and review them for impairment wheneveran impairment indicator exists. We continually monitor events and changes in circumstances that could indicate carrying amountsof our intangible assets may not be recoverable. When such events or changes in circumstances occur, we assess recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on any excess of the carrying amount over the fair value of the assets. We did not recognize any intangible asset impairment charges in the first quarter of 2014. Our intangible assets are amortized over their estimated useful lives of 7 to 10 years. Amortization is based on a straight-line basis as the consumption pattern of the asset is not apparent. The weighted average useful life of our acquired technology intangible assets was 8 years.
Concentration of Revenue and Accounts Receivable

Concentration of Revenue and Accounts Receivable

For the three months ended March 31, 2014 and 2013, the Company did not have any customer that represented more than 10% of the Company’s total revenue. There were no customers who represented greater than 10% of gross accounts receivable as of March 31, 2014 and December 31, 2013.
Significant Accounting Policies

Significant Accounting Policies

Other than the change to our reporting segments and the addition of the Company’s policy for accounting for goodwill and acquired intangibles, there have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
Recent Accounting Pronouncements

Recent Accounting Pronouncements

There have been no new accounting pronouncements during the three months ended March 31, 2014, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 that are of significance, or potential significance, to the Company.