We have agreements with third-party processors to provide gateway authorization and other processing services.
These agreements require us to submit a minimum number of transactions for processing. If we submit a number of transactions that is less than the minimum, we are required to pay the third party processors fees that they would have received if
we had submitted the required minimum number of transactions. Processing services includes amounts due under network sponsorship agreements.
Represents estimated TRA payments to various parties and cash payments to exercise the call options pursuant to
which certain additional obligations of the Company under the Fifth Third and Mercury TRAs would be terminated. See Note 8Tax Receivable Agreements in the notes to our audited consolidated financial statements included in Exhibit 99.1 to this
Current Report on Form 8-K for more details.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our audited Consolidated Financial Statements,
which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we
evaluate our critical estimates giving consideration to a combination of factors, including historical experience, current conditions and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may
differ from these estimates under different assumptions or conditions.
Except for the adoption of Accounting Standards Update 2014-09, Revenue From Contracts With Customers (Topic 606) on January 1, 2018 as discussed in Note 2Revenue Recognition in the notes to our audited consolidated financial statements included in
Exhibit 99.1 to this Current Report on Form 8-K, we have not adopted any new critical accounting policies, have not changed any critical accounting policies and have not changed the application of any critical accounting policies from the year ended
December 31, 2017. The accounting policies we believe to be most critical to understanding our financial results and condition and that require complex and subjective management judgments are discussed below.
At the date
of acquisition, in accordance with ASC 805, Business Combinations, we record the assets and liabilities of the acquired companies on the Consolidated Statements of Financial Position at their estimated fair value. The results of operations
for acquired companies are included in our Consolidated Statements of Income beginning at the acquisition date. Expenses arising from acquisition activities are recorded in our Consolidated Statements of Income during the period incurred. The
difference between the purchase price and the fair value of the net assets acquired (including identified intangibles) is recorded as goodwill .
In accordance with ASC
350, IntangiblesGoodwill and Other, we test goodwill for impairment for each reporting unit on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair
value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that fair value of the goodwill within the reporting unit is less than its carrying value. We performed our most recent annual goodwill
impairment test for all reporting units as of July 31, 2018 using market data and discounted cash flow analyses. Based on this analysis, it was determined that the fair value of all reporting units were substantially in excess of the carrying
value. There have been no other events or changes in circumstances subsequent to the testing date that would indicate impairment of these reporting units as of December 31, 2018.
Off-Balance Sheet Arrangements
We have no off-balance sheet financing arrangements.
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