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Basis Of Presentation | 6 Months Ended
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Dec. 31, 2011
Basis Of Presentation [Abstract] |
Basis Of Presentation | NOTE 1—BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of Open Text Corporation and our wholly owned subsidiaries, collectively referred to as "Open Text" or the "Company". All inter-company balances and transactions have been eliminated. These consolidated financial statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented and includes the financial results of System Solutions Australia Pty Limited (MessageManager), which is the sole shareholder of MessageManager Solutions Pty Limited, with effect from October 31, 2011, Operitel Corporation (Operitel), with effect from September 1, 2011, and Global 360 Holding Corp. (Global 360), with effect from July 13, 2011 (see note 17). Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, significant estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) allowance for doubtful accounts, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) asset retirement obligations, (x) the realization of investment tax credits, (xi) the valuation of stock options granted and liabilities related to share-based payments, including the valuation of our long-term incentive plan, (xii) the valuation of financial instruments, (xiii) the valuation of pension assets and obligations, and (xiv) accounting for income taxes. Change in Accounting Policy Upon adoption of Accounting Standards Codification (ASC) Topic 740-10 "Income Taxes" (Topic 740-10) in the fiscal year ended June 30, 2007, we had elected to follow an accounting policy to classify interest related to liabilities for income taxes under the 'Interest income / (expense), net' line and penalties related to liabilities for income taxes under the 'Other income / (expense)' line in our Condensed Consolidated Statements of Income. During the three months ended December 31, 2011, we elected to change this accounting policy to classify both interest and penalties relating to liabilities for income taxes in the 'Provision for (recovery of) income taxes' line in our Condensed Consolidated Statements of Income. The revised classification is more appropriate under the circumstances for the following reasons:
| 1) | During the three months ended December 31, 2011 we entered into a new credit agreement (see note 10) which effectively doubled our bank-related borrowings. In the context of this event, we believe it is preferable for the 'Interest income/(expense), net' line to be reflective of financial interest income and interest expense relating to borrowings.
| 2) | The revised policy is more aligned with the accounting policy followed by the Company's publicly listed competitors and would lead to enhanced comparability with the Company's publicly listed competitors;
| 3) | The internal reorganization of the Company's international subsidiaries in the fiscal year ended June 30, 2010, to consolidate our international intellectual property in certain jurisdictions and recent business acquisitions have increased the complexity of determining the Company's liability for income taxes in multiple jurisdictions and it is preferable to record the related interest and penalties associated with the liability for income taxes as a component of the "Provision for (recovery of) income taxes" line within our Condensed Consolidated Statements of Income.
As a result of this accounting policy change certain prior period comparative figures have been adjusted to conform to current period presentation. "Other (expense), net" was increased by approximately $0.3 million and $0.2 million, respectively, for the three and six months ended December 31, 2010 from previously reported amounts. 'Interest (expense), net' was reduced by approximately $0.3 million and $2.2 million, respectively, for the three and six months ended December 31, 2010 from previously reported amounts. The 'Provision for income taxes' was increased by approximately $0.02 million and $2.0 million, respectively, for the three and six months ended December 31, 2010. There was no change to income from operations, net income or net income per share in any of the periods presented as a result of these reclassifications. Comprehensive income The following table sets forth the components of comprehensive income for the reporting periods indicated:
|  | Three months ended December 31, |  |  | Six months ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Net income for the period |  | $ | 47,443 |  |  | $ | 37,110 |  |  | $ | 82,429 |  |  | $ | 58,781 |
Other comprehensive income—net of tax, where applicable: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments |  |  | (1,354 | ) |  |  | 1,168 |  |  |  | (11,972 | ) |  |  | 7,145 |
Unrealized gain (loss) on cash flow hedges |  |  | 3,132 |  |  |  | 1,419 |  |  |  | (2,070 | ) |  |  | 2,989 |
Unrealized gain on marketable securities |  |  | — |  |  |  | 57 |  |  |  | — |  |  |  | 101 |
Actuarial gain (loss) relating to defined benefit pension plans |  |  | 342 |  |  |  | — |  |  |  | (206 | ) |  |  | — |
Comprehensive income for the period |  | $ | 49,563 |  |  | $ | 39,754 |  |  | $ | 68,181 |  |  | $ | 69,016 |

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