XML 71 R49.htm IDEA: XBRL DOCUMENT v3.5.0.2
Visa Europe - Accounting Treatment (Details)
$ in Millions, € in Billions
12 Months Ended
Jun. 21, 2016
EUR (€)
Jun. 21, 2016
USD ($)
Sep. 30, 2016
USD ($)
Sep. 30, 2015
USD ($)
Sep. 30, 2014
USD ($)
Jun. 21, 2016
USD ($)
Business Acquisition [Line Items]            
Less: Visa Europe Framework Agreement loss   $ (1,900) $ (1,877) $ 0 $ 0  
Preferred stock, as-is converted basis     5,717 0 0  
Preferred Stock, discount for illiquidity (percent) 6.00%         6.00%
Right to recover for covered losses     (34) 0 $ 0 $ 25
Interest payable on third anniversary of closing (percent) 1.20%         1.20%
Visa Europe            
Business Acquisition [Line Items]            
Cash payment € 12.2 13,882        
Fair value of preferred stock [1]           $ 5,692
Total upfront consideration   19,574        
Fair value of deferred cash consideration [2]           1,236
Total consideration before adjustments   20,810        
Less: Visa Europe Framework Agreement loss   (1,856) [3] (1,184)      
Total accounting purchase consideration   18,784        
Preferred stock, as-is converted basis 5.3 $ 6,100        
Contingent consideration | € 1.0          
Accrued interest on contingent consideration | € € 0.0          
Class C common stock            
Business Acquisition [Line Items]            
Less: Treasury stock     $ 0 $ 0   $ (170) [4]
[1] The fair value of preferred stock was determined based on its as-converted value of $6.1 billion on June 21, 2016, less a 6% discount for illiquidity as these shares are subject to limitations on transferability. The fair value was also adjusted to reflect $25 million of "right to recover for covered losses" related to VE territory covered losses prior to the Closing. See Note 20—Legal Matters.
[2] This amount reflects the fair value of deferred cash consideration of €1.0 billion, plus 4.0% compound annual interest, payable on the third anniversary of the Closing, discounted at a rate of 1.2%.
[3] the loss upon consummation of the transaction resulting from the effective settlement of the Framework Agreement between Visa and Visa Europe. The Visa Europe Framework Agreement provided Visa Europe with a perpetual, exclusive right to operate the Visa business in the Visa Europe region in exchange for a license fee paid to Visa. Under the terms of the Framework Agreement, the license fee paid by Visa Europe has increased modestly since inception in 2007, while the value of the Visa Europe business has increased at a greater rate. Using an income approach, the Company assessed the contractual terms and conditions of the Framework Agreement as compared to current market conditions and the historical and expected financial performance of Visa Europe. Based on the analysis performed, the Company determined that the terms were not at fair value as determined under U.S. GAAP at the Closing. The present value of the expected differential between payments required by the Framework Agreement and those that would be required if the contract were at fair value under U.S. GAAP was calculated over the Framework Agreement's contractual perpetual term, resulting in a loss of $1.9 billion recognized within operating expense in the Company's consolidated statement of operations during the third quarter of fiscal 2016, and a reduction to the purchase accounting consideration; and
[4] the fair value of the Visa class C common stock held by Visa Europe as of the Closing.