Basis of Presentation

12 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

The accompanying Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as "OpenText" or the "Company". We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd. (OT South Africa), GXS, Inc. (GXS Korea) and EC1 Pte. Ltd. (GXS Singapore), which as of June 30, 2016, were 90%, 85% and 81% owned, respectively, by OpenText. 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 Daegis Inc. (Daegis), with effect from November 23, 2015, certain customer experience software and services assets and liabilities acquired from HP Inc. (CEM Business), with effect from April 30, 2016, and ANXe Business Corporation (ANX) with effect from May 1, 2016 (see note 18).

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) the realization of investment tax credits, (x) the valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plan, (xi) the valuation of pension assets and obligations, and (xii) accounting for income taxes.

Reclassifications

Certain prior period balances have been reclassified to conform to the current period presentation including the reclassification related to a change in the method of allocating certain operating expenses within the Company. As a result of such reclassifications, the following expenses have been reclassified for Fiscal 2015 and Fiscal 2014 as follows:



	Year Ended June 30,
	2015			2014
Reclassifications within cost of revenue
Decrease to cost of revenue - Cloud services and subscriptions	$	(2,409	)	$	(473	)
Increase (decrease) to cost of revenue - Customer support	$	(310	)	$	89
Decrease to cost of revenue - Professional services and other	$	(657	)	$	(544	)
Reclassifications within operating expenses
Decrease to operating expense - General and administrative	$	(314	)	$	(370	)
Increase to operating expense - Sales and marketing	$	3,690		$	1,298

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.