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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2013	Mar. 01, 2014	Jun. 30, 2013
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Entity Registrant Name	EPAM Systems, Inc.
Entity Central Index Key	0001352010
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		46,848,703
Entity Public Float			$ 653.3

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 169,207	$ 118,112
Accounts receivable, net of allowance of $1,800 and $2,203 respectively	95,431	78,906
Unbilled revenues	43,108	33,414
Prepaid and other current assets	14,355	11,835
Employee loans, net of allowance for loan losses of $0 and $0, respectively, current	1,989	429
Time deposits	1,188	1,006
Restricted cash, current	298	660
Deferred tax assets, current	5,392	6,593
Total current assets	330,968	250,955
Property and equipment, net	53,315	53,135
Restricted cash, long-term	225	467
Employee loans, net of allowance for loan losses of $0 and $0, respectively, long-term	4,401	0
Intangible assets, net	13,734	16,834
Goodwill	22,268	22,698
Deferred tax assets, long-term	4,557	6,093
Other long-term assets	3,409	632
Total assets	432,877	350,814
Current liabilities
Accounts payable	2,835	6,095
Accrued expenses and other liabilities	20,175	19,814
Deferred revenues, current	4,543	6,369
Due to employees	12,665	12,026
Taxes payable	14,171	14,557
Deferred tax liabilities, current	275	491
Total current liabilities	54,664	59,352
Deferred revenues, long-term	533	1,263
Taxes payable, long-term	1,228	1,228
Deferred tax liabilities, long-term	351	2,691
Total liabilities	56,776	64,534
Commitments and contingencies (See Note 16)
Stockholders' equity
Common stock, $0.001 par value; 160,000,000 authorized; 47,569,463 and 45,398,523 shares issued, 46,614,916 and 44,442,494 shares outstanding at December 31, 2013 and December 31, 2012, respectively	46	44
Additional paid-in capital	195,585	166,962
Retained earnings	190,986	128,992
Treasury stock	(8,684)	(8,697)
Accumulated other comprehensive loss	(1,832)	(1,021)
Total stockholders' equity	376,101	286,280
Total liabilities and stockholders' equity	$ 432,877	$ 350,814

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Accounts receivable, allowance	$ 1,800	$ 2,203
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	160,000,000	160,000,000
Common stock, shares issued (in shares)	47,569,463	45,398,523
Common stock, shares outstanding	46,614,916	44,442,494

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Revenues

$ 555,117

$ 433,799

$ 334,528

Operating expenses:

Cost of revenues (exclusive of depreciation and amortization)

347,650

270,361

205,336

Selling, general and administrative expenses

116,497

85,868

64,930

Depreciation and amortization expense

15,120

10,882

7,538

Goodwill impairment loss

1,697

Other operating (income)/ expenses, net

(643)

682

Income from operations

76,493

66,006

55,008

Interest and other income, net

3,077

1,941

1,422

Foreign exchange loss

(2,800)

(2,084)

(3,638)

Total

76,770

65,863

52,792

Provision for income taxes

14,776

11,379

8,439

Net income

61,994

54,484

44,353

Cumulative translation adjustment

(811)

2,493

(1,250)

Comprehensive income

61,183

56,977

43,103

Accretion of preferred stock

(17,563)

Net income allocated to participating securities

(3,341)

(15,025)

Net income available for common stockholders

$ 61,994

$ 51,143

$ 11,765

Net income per share of common stock:

Basic (in dollars per share)

^[1]

$ 1.35

$ 1.27

Diluted (in dollars per share)

^[1]

$ 1.28

$ 1.17

Shares used in calculation of net income per share of common stock:

Weighted Average Number of Shares Outstanding, Basic

45,754

40,190

17,094

Weighted Average Number of Shares Outstanding, Diluted

48,358

43,821

20,473

Common Stock [Member]

Operating expenses:

Net income

$ 61,994

$ 54,484

$ 44,353

Net income available for common stockholders

$ 61,994

$ 51,143

$ 11,765

Net income per share of common stock:

Basic (in dollars per share)

$ 1.35

$ 1.27

$ 0.69

Diluted (in dollars per share)

$ 1.28

$ 1.17

$ 0.63

Shares used in calculation of net income per share of common stock:

Weighted Average Number of Shares Outstanding, Basic

45,754,000

40,190,000

17,094,000

Weighted Average Number of Shares Outstanding, Diluted

48,358,000

43,821,000

20,473,000

Puttable Common Stock [Member]

Operating expenses:

Net income available for common stockholders

$ 0

$ 26

Net income per share of common stock:

Basic (in dollars per share)

$ 0

$ 1.42

Diluted (in dollars per share)

$ 0

$ 0.77

Shares used in calculation of net income per share of common stock:

Weighted Average Number of Shares Outstanding, Basic

18,000

Weighted Average Number of Shares Outstanding, Diluted

18,000

[1]	Earnings per share amounts for each quarter may not necessarily total to the yearly earnings per share due to the weighting of shares outstanding on a quarterly and year-to-date basis.

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Series A-1 and A-2, Convertible Redeemable Preferred Stock	Common Stock [Member]	Common Stock [Member] Initial Public Offering	Common Stock [Member] Instant Information Inc	Common Stock [Member] Thoughtcorp Inc	Common Stock [Member] Empathy Lab LLC	Series A-3 Convertible Preferred Stock [Member]	Additional Paid-in Capital	Additional Paid-in Capital Initial Public Offering	Additional Paid-in Capital Instant Information Inc	Additional Paid-in Capital Thoughtcorp Inc	Additional Paid-in Capital Empathy Lab LLC	Retained Earnings	Treasury Stock	Treasury Stock Thoughtcorp Inc	Treasury Stock Empathy Lab LLC	Accumulated Other Comprehensive Income	Total	Initial Public Offering	Instant Information Inc	Thoughtcorp Inc	Empathy Lab LLC	Puttable Common Stock [Member]
Beginning Balance (in shares) at Dec. 31, 2010	2,439,739	17,054,408					290,277																56,896
Beginning Balance at Dec. 31, 2010	$ 68,377	$ 17						$ 36,750					$ 47,718	$ (15,972)			$ (2,264)	$ 66,249					$ 332
Accretion of A-2 preferred stock to redemption value	$ 17,563												(17,563)					(17,563)
Stock-based compensation expense								2,866										$ 2,866
Proceeds from stock options exercises (in shares)		47,600																47,600
Proceeds from stock options exercises								72										$ 72
Put option expiry (in shares)		56,896																56,896					(56,896)
Put option expiry								332										$ 332					$ (332)
Currency translation adjustment																	(1,250)	(1,250)
Net income													44,353					44,353
Ending Balance (in shares) at Dec. 31, 2011	2,439,739	17,158,904					290,277
Ending Balance at Dec. 31, 2011	$ 85,940	$ 17						40,020					74,508	(15,972)			(3,514)	95,059
Stock issued (in shares)			2,900,000
Stock issued			$ 3						$ 32,361										$ 32,364
Conversion to common stock (in shares)	(2,439,739)	21,840,128					(290,277)
Conversion to common stock	$ (85,940)	$ 22						85,918										85,940
Offering issuance costs									$ (3,395)										$ (3,395)
Issuance of restricted stock		213,656
Stock issued in connection with acquisition (in shares)				53,336	434,546	326,344														53,336
Stock issued in connection with acquisition										$ 640	$ (346)	$ (2,969)			$ 3,953	$ 2,969				$ 640	$ 3,607
Stock-based compensation expense								6,826										$ 6,826
Proceeds from stock options exercises (in shares)		1,515,580																1,552,742
Proceeds from stock options exercises		$ 2						4,963										$ 4,965
Treasury stock retirement								(353)						353
Excess tax benefits								3,297										3,297
Currency translation adjustment																	2,493	2,493
Net income													54,484					54,484
Stock issued under the 2012 Non-Employee Directors Compensation Plan (Note 14)			2,900,000
Ending Balance (in shares) at Dec. 31, 2012		44,442,494
Ending Balance at Dec. 31, 2012		$ 44						166,962					128,992	(8,697)			(1,021)	286,280
Stock issued (in shares)		14,041
Stock issued in connection with acquisition (in shares)						1,483
Stock issued in connection with acquisition																$ 13						$ (13)
Stock-based compensation expense								13,150										$ 13,150
Proceeds from stock options exercises (in shares)		2,156,898																2,156,898
Proceeds from stock options exercises		$ 2						9,285										$ 9,287
Excess tax benefits								6,201										6,201
Currency translation adjustment																	(811)	(811)
Net income													61,994					61,994
Stock issued under the 2012 Non-Employee Directors Compensation Plan (Note 14)		14,041
Ending Balance (in shares) at Dec. 31, 2013		46,614,916
Ending Balance at Dec. 31, 2013		$ 46						$ 195,585					$ 190,986	$ (8,684)			$ (1,832)	$ 376,101

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 61,994	$ 54,484	$ 44,353
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15,120	10,882	7,538
Bad debt expense	335	662	727
Deferred taxes	41	(3,933)	497
Stock-based compensation expense	13,150	6,826	2,866
Excess tax benefits on stock-based compensation plans	(6,201)	(3,297)	0
Non-cash stock charge	0	640	0
Goodwill impairment loss	0	0	1,697
Other	1,199	(66)	777
(Increase)/ decrease in operating assets:
Accounts receivable	(17,302)	(12,664)	(19,030)
Unbilled revenues	(9,833)	(6,905)	(1,004)
Prepaid expenses and other assets	587	(1,339)	(1,694)
Increase/ (decrease) in operating liabilities:
Accounts payable	(2,900)	1,407	254
Accrued expenses and other liabilities	501	(5,825)	9,474
Deferred revenues	(2,325)	(767)	1,843
Due to employees	785	2,896	2,796
Taxes payable	3,074	5,498	3,426
Net cash provided by operating activities	58,225	48,499	54,520
Cash flows from investing activities:
Purchases of property and equipment	(13,360)	(13,376)	(15,548)
Payments for construction of corporate facilities	(2,560)	(13,701)	(1,545)
Issuance of employee housing loans	(7,982)	0	0
Proceeds from repayments of employee housing loans	2,189	0	0
Decrease/(increase) in restricted cash, net (Note 6)	429	470	(144)
Increase in other long-term assets, net	(516)	(69)	(171)
Acquisition of businesses, net of cash acquired (Note 2)	(20)	(32,951)	0
Net cash used in investing activities	(21,820)	(59,627)	(17,408)
Cash flows from financing activities:
Proceeds related to stock options exercises	9,300	4,951	72
Excess tax benefits on stock-based compensation plans	6,201	3,297	0
Net proceeds from issuance of common stock in initial public offering	0	32,364	0
Costs related to stock issue	0	(1,765)	(1,630)
Proceeds related to line of credit	0	0	5,000
Repayment related to line of credit	0	0	(5,000)
* Net cash provided by/(used in) financing activities *	15,501	38,847	(1,558)
Effect of exchange-rate changes on cash and cash equivalents	(811)	1,597	(762)
Net increase in cash and cash equivalents	51,095	29,316	34,792
Cash and cash equivalents, beginning of year-January 1	118,112	88,796	54,004
Cash and cash equivalents, end of year	169,207	118,112	88,796
Cash paid during the year for:
Income taxes	10,207	13,065	7,007
Bank interest	$ 26	$ 14	$ 37

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Total incurred but not paid costs related to stock issue
Summary of non-cash investing and financing transactions:
Other significant noncash transactions	$ 0	$ 0	$ 470
Total incurred but not paid costs related to acquisition of businesses
Summary of non-cash investing and financing transactions:
Other significant noncash transactions	0	96	0
Series A-2 Convertible Redeemable Preferred Stock [Member]
Summary of non-cash investing and financing transactions:
Accretion of convertible redeemable preferred stock	$ 0	$ 0	$ 17,563

NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2012

NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

1.	NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

EPAM Systems, Inc. (the “Company” or “EPAM”) is a leading provider of complex software engineering solutions and a leader in Central and Eastern European IT services delivery. The Company provides these solutions primarily to Fortune Global 2000 companies in multiple verticals, including Independent Software Vendors (“ISVs”) and Technology, Banking and Financial services, Business Information and Media, and Travel and Consumer.

Since EPAM’s inception in 1993, the Company has focused on providing software product development services, software engineering and vertically-oriented custom development solutions through its global delivery model. This has served as a foundation for the Company’s other solutions, including custom application development, application testing, platform-based solutions, application maintenance and support, and infrastructure management.

The Company is incorporated in Delaware with headquarters in Newtown, PA, with multiple delivery centers located in Belarus, Ukraine, Russia, Hungary, Kazakhstan and Poland, and client management locations in the United States, Canada, the United Kingdom, Germany, Sweden, Switzerland, Netherlands, Russia, Kazakhstan, Singapore, Hong Kong and Australia.

Emerging growth company status — In April 2012, several weeks after EPAM’s initial public offering in February 2012, President Obama signed into law the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act contains provisions that relax certain requirements for “emerging growth companies” that otherwise apply to larger public companies. For as long as a company retains emerging growth company status, which may be until the fiscal year-end after the fifth anniversary of its initial public offering, it will not be required to (1) provide an auditor’s attestation report on its management’s assessment of the effectiveness of its internal control over financial reporting, otherwise required by Section 404(b) of the Sarbanes-Oxley Act of 2002, (2) comply with any new or revised financial accounting standard applicable to public companies until such standard is also applicable to private companies, (3) comply with certain new requirements adopted by the Public Company Accounting Oversight Board, (4) provide certain disclosure regarding executive compensation required of larger public companies or (5) hold shareholder advisory votes on matters relating to executive compensation.

EPAM is classified as an emerging growth company under the JOBS Act and is eligible to take advantage of the accommodations described above for as long as it retains this status. However, EPAM has elected not to take advantage of the transition period described in (2) above, which is the exemption provided in Section 7(a)(2)(B) of the Securities Act of 1933 and Section 13(a) of the Securities Exchange Act of 1934 (in each case as amended by the JOBS Act) for complying with new or revised financial accounting standards. EPAM will therefore comply with new or revised financial accounting standards to the same extent that a non-emerging growth company is required to comply with such standards.

Principles of Consolidation — The consolidated financial statements include the financial statements of EPAM Systems, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated.

Reclassifications — The Company reclassified certain prior period amounts to conform to the current period presentation. Such reclassifications had no effect on the Company’s results of operations or total stockholders’ equity.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. These estimates and assumptions affect reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience, knowledge of current conditions and its beliefs of what could occur in the future, given available information. Actual results could differ from those estimates, and such differences may be material to the financial statements.

Business Combinations — The Company allocates the total cost of an acquisition to the underlying net assets based on their respective estimated fair values. As part of this allocation process, the Company identifies and attributes values and estimated lives to the intangible assets acquired. These determinations involve significant estimates and assumptions about several highly subjective variables, including future cash flows, discount rates, and asset lives. There are also different valuation models for each component, the selection of which requires considerable judgment. These determinations will affect the amount of amortization expense recognized in future periods. The Company bases its fair value estimates on assumptions it believes are reasonable, but recognizes that the assumptions are inherently uncertain. Depending on the size of the purchase price of a particular acquisition and the mix of intangible assets acquired, the purchase price allocation could be materially impacted by applying a different set of assumptions and estimates.

Revenue Recognition — The Company recognizes revenue when realized or realizable and earned, which is when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the sales price is fixed or determinable; and collectability is reasonably assured. Determining whether and when some of these criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue the Company reports. If there is an uncertainty about the project completion or receipt of payment for the consulting services, revenues are deferred until the uncertainty is sufficiently resolved. At the time revenues are recognized, the Company provides for any contractual deductions and reduces revenues accordingly. The Company defers amounts billed to its clients for revenues not yet earned. Such amounts are anticipated to be recorded as revenues as services are performed in subsequent periods. Unbilled revenues represent services provided which are billed subsequent to the period end in accordance with the contract terms.

The Company derives its revenues from a variety of service offerings which represent specific competencies of its IT professionals. Contracts for these services have different terms and conditions based on the scope, deliverables, and complexity of the engagement which require management to make judgments and estimates in determining appropriate revenue recognition pattern. Fees for these contracts may be in the form of time-and-materials or fixed-price arrangements.

The majority of the Company’s revenues (82.3% of revenues in 2013, 84.1% in 2012 and 86.1% in 2011) is generated under time-and-material contracts whereby revenues are recognized as services are performed with the corresponding cost of providing those services reflected as cost of revenues when incurred. The majority of such revenues are billed on an hourly, daily or monthly basis whereby actual time is charged directly to the client.

Revenues from fixed-price contracts (15.7% of revenues in 2013, 13.7% in 2012 and 11.0% in 2011) are determined using the proportional performance method. In instances where final acceptance of the product, system, or solution is specified by the client, revenues are deferred until all acceptance criteria have been met. In absence of a sufficient basis to measure progress towards completion, revenue is recognized upon receipt of final acceptance from the client. In order to estimate the amount of revenue for the period under the proportional performance method, the Company determines the percentage of actual labor hours incurred as compared to estimated total labor hours and applies that percentage to the consideration allocated to the deliverable. The complexity of the estimation process and factors relating to the assumptions, risks and uncertainties inherent with the application of the proportional performance method of accounting affects the amounts of revenues and related expenses reported in the Company’s consolidated financial statements. A number of internal and external factors can affect such estimates, including labor hours and specification and testing requirement changes. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known. No significant revisions occurred in each of the three years ended December 31, 2013, 2012 and 2011. The Company’s fixed price contracts are generally recognized over a period of 12 months or less.

From time to time, the Company enters into multiple element arrangements with its customers. In vast majority of cases such multiple-element arrangements represent fixed-priced arrangements to develop a customized IT solution to meet the customer’s needs combined with warranty support over a specified period of time in the future, to which the Company refers to as the “warranty period.” The Company’s customers retain full intellectual property (IP) rights to the results of the Company’s services, and the software element created in lieu of such services is no more than incidental to any of the service deliverables, as defined in accordance with ASC 985-605-15-13. For such arrangements, the Company follows the guidance set forth in ASC 605-25, Revenue Recognition – Multiple Element Arrangements, as to whether multiple deliverables exist, how the arrangement should be separated, and how the consideration should be allocated. The Company recognizes revenue related to the delivered products only if all revenue recognition criteria are met and the delivered element has a standalone value to the customer and allocates total consideration among the deliverables based on their relative selling prices. Revenue related to the software development services is recognized under the proportional performance method, as described above, while warranty support services are recognized on a straight-line basis over the warranty period. The warranty period is generally three months to two years.

The Company reports gross reimbursable “out-of-pocket” expenses incurred as both revenues and cost of revenues in the consolidated statements of income.

Cost of Revenues (Exclusive of Depreciation and Amortization) — Consists principally of salaries, employee benefits and stock compensation expense, reimbursable and non-reimbursable travel costs and subcontractor fees.

Selling, General and Administrative Expenses — Consist of expenses associated with promoting and selling the Company’s services and include such items as sales and marketing personnel salaries, stock compensation expense and related fringe benefits, commissions, travel, and the cost of advertising and other promotional activities. General and administrative expenses include other operating items such as officers’ and administrative personnel salaries, marketing personnel salaries, stock compensation expense and related fringe benefits, legal and audit expenses, insurance, provision for doubtful accounts, and operating lease expenses.

Fair Value of Financial Instruments — The Company makes significant assumptions about fair values of its financial instruments. Fair value is determined based on the assumptions that market participants would use in pricing the asset or liability. The Company utilizes the following fair value hierarchy in determining fair values:

Level 1 — Quoted prices for identical assets or liabilities in active markets.

Level 2 — Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including quoted prices in markets that are not active, quoted prices in active markets for similar assets or liabilities, and observable inputs other than quoted prices such as interest rates or yield curves.

Level 3 — Unobservable inputs reflecting our view about the assumptions that market participants would use in pricing the asset or liability.

Where the fair values of financial assets and liabilities recorded in the consolidated balance sheet cannot be derived from an active market, they are determined using a variety of valuation techniques. These valuation techniques include a net present value technique, comparison to similar instruments with market observable inputs, options pricing models and other relevant valuation models. Inputs into these models are taken from observable market data whenever possible, but in instances where it is not feasible, a degree of judgment is required to establish fair values. The Company had no assets or liabilities measured at fair value on a recurring basis as of December 31, 2013 or 2012.

The Company's financial assets and liabilities, with the exceptions of employee loans described further herein, are all short term in nature; therefore, the carrying value of these items approximates their fair value.

Employee Housing Loans — The Company issues loans to its employees under the Employee Housing Program (“housing loans”). Housing loans are issued in U.S. Dollars with a 5-year term and carry an interest rate of 7.5%. The program was designed to be a retention mechanism for the Company’s employees in Belarus.

Although permitted by authoritative guidance, the Company did not elect a fair value option for these financial instruments. These housing loans are measured at fair value upon initial recognition and subsequently carried at amortized cost less allowance for loan losses. Any difference between the carrying value and the fair value of a loan upon initial recognition (“day-one” recognition) is charged to expense.

The housing loans were classified as Level 3 measurements within the fair value hierarchy because they were valued using significant unobservable inputs. The estimated fair value of these housing loans upon initial recognition was computed by projecting the future contractual cash flows to be received from the loans and discounting those projected net cash flows to a present value, which is the estimated fair value (the “Income Approach”). In applying the Income Approach, the Company analyzed similar loans offered by third-party financial institutions in Belarusian Rubles (“BYR”) and adjusted the interest rates charged on such loans to exclude the effects of underlying economic factors, such as inflation and currency devaluation. The Company also assessed the probability of future defaults and associated cash flows impact. In addition, the Company separately analyzed the rate of return that market participants in Belarus would require when investing in unsecured USD-denominated government bonds with similar maturities (a “risk-free rate”) and evaluated a risk premium component to compensate the market participants for the credit and liquidity risks inherent in the loans’ cash flows, as described in the following paragraph. As a result of the analysis performed, the Company determined the carrying values of the housing loans issued during the year ended December 31, 2013 approximated their fair values upon initial recognition. The Company also estimated the fair values of the housing loans that were outstanding as of December 31, 2013 using the inputs noted above and determined their fair values approximated the carrying values as of that date.

Repayment of housing loans is primarily dependent on personal income of borrowers obtained through employment with the Company, which income is set in U.S. dollars and is not closely correlated with common macroeconomic risks existing in Belarus, such as inflation, local currency devaluation and decrease in the purchasing power of the borrowers’ income. Given a large demand for the program among the Company’s employees and its advantages as compared to alternative methods of financing available on the market, the Company expects the borrowers to fulfill their obligations, and the Company estimates the probability of voluntary termination of employment among the borrowers as de minimis. Additionally, housing loans are capped at $50 per loan and secured by real estate financed through the program. The Company establishes a maximum loan-to-value ratio of 70% and expects a decrease in the ratio over the life of a housing loan due to on-going payments by employees.

Employee loans, other — The Company also issues short-term non-interest bearing relocation loans and other employee loans. These loans are considered Level 3 measurements. The Company’s Level 3, unobservable inputs reflect its assumptions about the factors that market participants use in pricing similar receivables, and are based on the best information available in the circumstances. Due to the short-term nature of employee loans (i.e., the relatively short time between the origination of the instrument and its expected realization), the carrying amount is a reasonable estimate of fair value. As of December 31, 2013, the carrying values of these employee loans approximated their fair values.

Cash and Cash Equivalents — Cash equivalents are short-term, highly liquid investments that are readily convertible into cash, with maturities of three months or less at the date acquired. As of December 31, 2013 and 2012 all amounts were in cash.

Restricted Cash — Restricted cash represents cash that is restricted by agreements with third parties for special purposes (see Note 6).

Accounts Receivable — Accounts receivable are recorded at net realizable value. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its clients to make required payments. The allowance for doubtful accounts is determined by evaluating the relative creditworthiness of each client, historical collections experience and other information, including the aging of the receivables.

Recoveries of losses from accounts receivable written off in prior years are presented within income from operations on the Company’s consolidated statements of income. There were no collections in respect of prior year write-offs during the years ended December 31, 2013, 2012 or 2011.

The table below summarizes movements in qualifying accounts for the years ended December 31, 2013, 2012 and 2011:

	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions/ Other			Balance at End of Year
Allowance for Doubtful Accounts (Billed and Unbilled):
Fiscal Year 2011	$	1,671	$	1,234	$	(655	)	$	2,250
Fiscal Year 2012		2,250		1,244		(1,291	)		2,203
Fiscal Year 2013		2,203		619		(1,022	)		1,800

Employee Loans — Loans are initially recorded at their fair value, and subsequently measured at their amortized cost, less allowance for loan losses, if any. The Company intends to hold all employee loans until their maturity. Interest income is reported using the effective interest method. Where applicable, loan origination fees, net of direct origination costs, are deferred and recognized in interest income over the life of the loan.

Generally, loans are placed on non-accrual status at 90 days past due. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. All interest accrued but not collected for loans that are placed on non-accrual is reversed against interest income. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. Interest income on loans individually classified as impaired is recognized on a cash basis after all past due and current principal payments have been made.

Allowance for Loan Losses — The Company periodically evaluates loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, amounts of allowances are allocated to individual loans based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral, other sources of cash flow and legal options available to the Company. The allowance for loan losses is established when losses are deemed to have occurred through a provision for loan losses charged to income and represents management’s estimate of probable credit losses inherent in the loan portfolio. Write-offs of unrecoverable loans are charged against the allowance when management believes the uncollectability of a loan balance and any interest due thereon is confirmed. Subsequent recoveries, if any, are credited to the provision for bad debts.

Property and Equipment — Property and equipment acquired in the ordinary course of the Company’s operations are stated at cost, net of accumulated depreciation. Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets generally ranging from 3 to 50 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the improvement. Maintenance and repairs are expensed as incurred, while renewals and betterments are capitalized.

Goodwill and Other Intangible Assets — The Company accounts for its business combinations using the acquisition accounting method, which requires it to determine the fair value of net assets acquired and the related goodwill and other intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates, asset lives and market multiples. The Company’s acquisitions usually do not have significant amounts of tangible assets, as the principal assets it typically acquires are customer relationships, trade names, non-competition agreements, and workforce. As a result, a substantial portion of the purchase price is allocated to goodwill and other intangible assets.

Goodwill and intangible assets that have indefinite useful lives are not amortized but are tested annually for impairment. Events or circumstances that might require impairment testing of goodwill and other intangible assets include the loss of a significant client, the identification of other impaired assets within a reporting unit, loss of key personnel, the disposition of a significant portion of a reporting unit, significant decline in stock price or a significant adverse change in business climate or regulations. Intangible assets that have finite useful lives are amortized over their estimated useful lives on a straight-line basis.

As of December 31, 2013 and 2012, all of the Company’s intangible assets had finite lives and the Company did not incur any impairment losses in respect of its intangible assets during the years ended December 31, 2013, 2012 or 2011.

Effective in the fourth quarter of 2013, the Company changed the annual goodwill impairment assessment date for all of its reporting units from December 31^st to October 31^st, which represented a voluntary change in the annual goodwill impairment testing date. The Company is also required to assess the goodwill of its reporting units for impairment between annual assessment dates when events or circumstances dictate. This change does not delay, accelerate or avoid an impairment charge and is preferable as additional resources for the preparation, review, and conclusion of the annual goodwill impairment test are available at this time. Further, this timing more closely aligns with the Company’s annual budgeting and planning process. Information prepared during the annual budgeting and planning process is used extensively in the Company’s impairment assessment. The Company evaluates the recoverability of goodwill at a reporting unit level and it had three reporting units that were subject to the annual impairment testing in 2013. The Company’s annual impairment review as of October 31, 2013 and December 31, 2012 did not result in an impairment charge for any of these reporting units. It was impracticable to apply this change retrospectively, as the Company is unable to objectively determine significant estimates and assumptions that would have been used in those earlier periods without the use of hindsight.

For the Company’s annual impairment test, it compares the respective fair value of its reporting units to their respective carrying values in order to determine if impairment is indicated. If so, the implied fair value of the reporting unit’s goodwill is compared to its carrying amount, and the impairment loss is measured by the excess of the carrying value over fair value. The fair values are estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings multiples based on market data. These valuations are considered Level 3 measurements under FASB ASC Topic 820. The Company utilizes estimates to determine the fair value of the reporting units such as future cash flows, growth rates, capital requirements, effective tax rates and projected margins, among other factors. Estimates utilized in the future evaluations of goodwill for impairment could differ from estimates used in the current period calculations.

When facts and circumstances indicate potential impairment of amortizable intangible assets, the Company evaluates the recoverability of the asset’s carrying value, using estimates of undiscounted future cash flows that utilize a discount rate determined by its management to be commensurate with the risk inherent in the Company’s business model over the remaining asset life. The estimates of future cash flows attributable to intangible assets require significant judgment based on the Company’s historical and anticipated results. Any impairment loss is measured by the excess of carrying value over fair value.

Impairment of Long-Lived Assets — Long-lived assets, such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The assessment for potential impairment is based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future cash flows from its operations on an undiscounted basis at each reporting date. If such assets are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets. Property and equipment to be disposed of by sale is carried at the lower of the then current carrying value or fair value less estimated costs to sell. The Company did not incur any impairment of long-lived assets for 2013, 2012, or 2011.

Income Taxes — The provision for income taxes includes federal, state, local and foreign taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. Changes to enacted tax rates would result in either increases or decreases in the provision for income taxes in the period of changes. The Company evaluates the realizability of deferred tax assets and recognizes a valuation allowance when it is more likely than not that all, or a portion of, deferred tax assets will not be realized.

The realization of deferred tax assets is primarily dependent on future earnings. Any reduction in estimated forecasted results may require that we record valuation allowances against deferred tax assets. Once a valuation allowance has been established, it will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that the deferred tax assets will be realized. A pattern of sustained profitability will generally be considered as sufficient positive evidence to reverse a valuation allowance. If the allowance is reversed in a future period, the income tax provision will be correspondingly reduced. Accordingly, the increase and decrease of valuation allowances could have a significant negative or positive impact on future earnings. See Note 10 to the consolidated financial statements for further information.

Changes in tax laws and rates may affect recorded deferred tax assets and liabilities and our effective tax rate in the future. The American Taxpayer Relief Act of 2012 (the “Act”) was signed into law on January 2, 2013. Because a change in tax law is accounted for in the period of enactment, certain provisions of the Act benefiting the Company’s 2012 U.S. federal taxes, including the Subpart F controlled foreign corporation look-through exception were not recognized in the Company’s 2012 financial results and instead were reflected in the Company’s 2013 financial results.

Earnings per Share (“EPS”) — Basic EPS is computed by dividing the net income applicable to common stockholders for the period by the weighted average number of shares of common stock outstanding during the same period. The Company’s Series A-1 Preferred, Series A-2 Preferred, and Series A-3 Preferred Stock, that had been outstanding and convertible into common stock until February 13, 2012 (the date of the Company’s initial public offering), and our puttable common stock were considered participating securities since these securities had non-forfeitable rights to dividends or dividend equivalents during the contractual period and thus required the two-class method of computing EPS. When calculating diluted EPS, the numerator is computed by adding back the undistributed earnings allocated to the participating securities in arriving at the basic EPS and then reallocating such undistributed earnings among our common stock, participating securities and the potential common shares that result from the assumed exercise of all dilutive options. The denominator is increased to include the number of additional common shares that would have been outstanding had the options been issued.

Accounting for Stock-Based Employee Compensation Plans — Stock-based compensation expense for awards of equity instruments to employees and non-employee directors is determined based on the grant-date fair value of the awards ultimately expected to vest. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the option vesting term of four years (See Note14.)

The Company estimates forfeitures at the time of grant and revises its estimates, if necessary, in subsequent periods if actual forfeitures or vesting differ from those estimates. Such revisions could have a material effect on the Company’s operating results. The assumptions used in the valuation model are based on subjective future expectations combined with management judgment. If any of the assumptions used in the valuation model changes significantly, stock-based compensation for future awards may differ materially compared to the awards previously granted.

Off-Balance Sheet Financial Instruments — Off-balance sheet financial instruments include credit instruments, such as commitments to make employee loans and related guarantees, standby letters of credit and guarantees issued under customer contracts. The face amount for these items represents the exposure to loss, before considering available collateral or the borrower’s ability to repay. Such financial instruments are recorded when they are funded. Loss contingencies arising from off-balance sheet credit exposures are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company does not believe there are such matters that will have a material effect on the consolidated financial statements.

Foreign Currency Translation — Assets and liabilities of consolidated foreign subsidiaries, whose functional currency is the local currency, are translated to U.S. dollars at period end exchange rates. Revenues and expenses are translated to U.S. dollars at daily exchange rates. The adjustment resulting from translating the financial statements of such foreign subsidiaries to U.S. dollars is reflected as a cumulative translation adjustment and reported as a component of accumulated other comprehensive income.

The Company reports the effect of exchange rate changes on cash balances held in foreign currencies as a separate item in the reconciliation of the changes in cash and cash equivalents during the period. Transaction gains and losses are included in the period in which they occur.

Risks and Uncertainties — Principally all of the Company’s IT delivery centers and a majority of its employees is located in Central and Eastern Europe. As a result, the Company may be subject to certain risks associated with international operations, risks associated with the application and imposition of protective legislation and regulations relating to import and export, or otherwise resulting from foreign policy or the variability of foreign economic or political conditions. Additional risks associated with international operations include difficulties in enforcing intellectual property rights, the burdens of complying with a wide variety of foreign laws, potential geopolitical and other risks associated with potentially adverse tax consequences, tariffs, quotas and other barriers.

Concentration of Credit — Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of employee loans, cash and cash equivalents, trade accounts receivable and unbilled revenues.

At December 31, 2013, loans issued to employees were $6,390, or 1.5%, of our total assets. These loans expose the Company to a risk of non-payment and loss. Repayment of these loans is primarily dependent on personal income of borrowers obtained through their employment with EPAM and may be adversely affected by changes in macroeconomic situations, such as higher unemployment levels, currency devaluation and inflation. Additionally, continuing financial stability of a borrower may be adversely affected by job loss, divorce, illness or personal bankruptcy. The Company also faces the risk that the collateral will be insufficient to compensate it for loan losses, if any, and costs of foreclosure. Decreases in real estate values could adversely affect the value of property used as collateral, and the Company may be unsuccessful in recovering the remaining balance from either the borrower and/or guarantors.

The Company maintains its cash with financial institutions. As of December 31, 2013, $103.1 million of total cash was held in CIS countries, with $73.9 million of that in Belarus. Banking and other financial systems in the CIS are less developed and regulated than in some more developed markets, and legislation relating to banks and bank accounts is subject to varying interpretations and inconsistent application. Banks in the CIS generally do not meet the banking standards of more developed markets, and the transparency of the banking sector lags behind international standards. Furthermore, bank deposits made by corporate entities in CIS are not insured. As a result, the banking sector remains subject to periodic instability. Another banking crisis, or the bankruptcy or insolvency of banks through which the Company receives or with which it holds funds, particularly in Belarus, may result in the loss of its deposits or adversely affect its ability to complete banking transactions in the CIS, which could materially adversely affect the Company’s business and financial condition.

Trade accounts receivable and unbilled revenues are generally dispersed across EPAM’s customers in proportion to their revenues. During the years ended December 31, 2013, 2012 and 2011, revenues from top five customers were $169,987, $ 134,484, and $107,171, respectively, representing 30.6%, 31.0% and 32.0%, respectively, of total revenues in the corresponding periods. Revenues from the Company’s top ten customers were $234,955, $192,426 and $149,094 in 2013, 2012 and 2011, respectively, representing 42.3%, 44.4%, and 44.6%, respectively, of total revenues in corresponding periods. No customer accounted for over 10% of total revenues in 2013 or 2012. As of December 31, 2013, unbilled revenues from two customers individually exceeded 10% of total unbilled revenues and jointly accounted for 33.3% of total unbilled revenues as of that date; and one customer accounted for over 10% of total accounts receivable as of that date.

During the years ended December 31, 2013, 2012 and 2011 the Company incurred subcontractor costs of $2,078, $3,535 and $4,545, respectively, to a vendor for staffing, consulting, training, recruiting and other logistical / support services provided for the Company’s delivery and development operations in Eastern Europe. Such costs are included in cost of revenues and sales, general and administrative expenses, as appropriate, in the accompanying consolidated statements of income and comprehensive income.

Foreign currency risk — The Company generates revenues in various global markets based on client contracts obtained in non-U.S. dollar currencies, principally, Euros, British pounds and Russian Rubles. The Company incurs expenditures in non-U.S. dollar currencies, principally in Hungarian Forints, Euros, and Russian Rubles associated with the IT delivery centers located in CEE. The Company is exposed to fluctuations in foreign currency exchange rates primarily on accounts receivable and unbilled revenues from sales in these foreign currencies, and cash flows for expenditures in foreign currencies. The Company does not use derivative financial instruments to hedge the risk of foreign exchange volatility.

Interest rate risk — The Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s cash and cash equivalents and the LIBOR plus 1.25% rate long-term credit facility (see Note 12). The Company does not use derivative financial instruments to hedge the risk of interest rate volatility.

Recent Accounting Pronouncements — In January 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.” The ASU clarifies that ordinary trade receivables and receivables are not in the scope of ASU 2012-11, “Disclosures about Offsetting Assets and Liabilities.” ASU 2012-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the Codification or subject to a master netting arrangement or similar agreement. The ASU is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods and requires retrospective application for all comparative periods presented. The Company adopted the ASU effective January 1, 2013. The adoption of this standard did not have any effect on the Company’s financial condition, results of operations and cash flows.

In February 2013, the FASB issued ASU 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income (“AOCI”.) The ASU is intended to help entities improve the transparency of changes in other comprehensive income (OCI) and items reclassified out of AOCI in their financial statements. It does not amend any existing requirements for reporting net income or OCI in the financial statements. New disclosure requirements are effective for fiscal periods beginning after December 15, 2012 and are applied prospectively. The Company adopted the ASU effective January 1, 2013. The adoption of this standard did not have any effect on the Company’s financial reporting because the only item that had historically affected AOCI and therefore included in cumulative AOCI was currency translation adjustments.

In March 2013, the FASB issued ASU 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” ASU 2013-05 updates accounting guidance related to the application of consolidation guidance and foreign currency matters. This guidance resolves the diversity in practice about what guidance applies to the release of the cumulative translation adjustment into net income. This guidance is effective for interim and annual periods beginning after December 15, 2013. The Company does not expect the adoption of this pronouncement to have a material effect on its financial condition, results of operations and cash flows.

In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 is a new accounting standard on the financial statement presentation of unrecognized tax benefits. The new standard provides that a liability related to an unrecognized tax benefit would be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The new standard becomes effective for the periods commencing January 1, 2014, and it should be applied prospectively to unrecognized tax benefits that exist at the effective date with retrospective application permitted. The Company is currently assessing the impacts of this new standard on its financial conditions, results of operating and cash flows.

- Definition

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References + Details

ACQUISITIONS

12 Months Ended

Dec. 31, 2012

ACQUISITIONS [Abstract]

ACQUISITIONS

2.	ACQUISITIONS

Empathy Lab, LLC — On December 18, 2012, the Company completed its acquisition of substantially all of the assets and assumed certain liabilities of Empathy Lab, LLC (“Empathy Lab”), a U.S.-based digital strategy and multi-channel experience design firm. The acquisition has enhanced the Company’s strong capabilities in global delivery of software engineering services with the proven expertise in two important growth areas-development and execution of enterprise-wide eCommerce initiatives and transformation of media consumption and distribution channels. In addition to strengthening our Travel and Consumer and Business Information and Media verticals, Empathy Lab brings significant expertise in digital marketing strategy consulting and program management.

The total preliminary purchase price of $27,257 was allocated to net tangible and intangible assets based on their estimated fair values as of December 18, 2012. During the second quarter of 2013, the Company finalized the fair values of the assets acquired and liabilities assumed. As a result, total consideration transferred was set at $27,172, as presented in the following table. The purchase price was paid in cash, of which approximately 10% was placed in escrow for a period of 18 months as a security for the indemnification obligations of the sellers under the asset purchase agreement.

The purchase price was allocated to the assets acquired based on their related fair values, as follows:

	Amount
Cash and cash equivalents	$	1,191
Trade receivables and other current assets		5,983
Property and equipment		186
Deferred tax asset		30
Acquired intangible assets		11,200
Goodwill		11,359
Total assets acquired		29,949
Accounts payable and accrued expenses		1,113
Deferred revenue and other liabilities		1,664
Total liabilities assumed		2,777
Net assets acquired	$	27,172

In addition, the Company issued to the sellers a total of 327,827 shares of non-vested (“restricted”) common stock contingent on their continued employment with the Company (Note 14), including 1,483 shares issued on July 11, 2013, to settle the difference between the initial number of shares issued upon acquisition and the total number of shares due in connection with this transaction. Of these shares, 65,500 shares were placed in escrow for a period of 18 months as a security for the indemnification obligations of the sellers under the asset purchase agreement. The restricted stock had an estimated value of $6,797 at the time of grant and will be recorded as a stock-based compensation expense over an associated service period of three years.

The Company also agreed to issue stock options to certain employees acquired through the Empathy Lab acquisition. The stock options were issued in the amount by which the acquiree’s revenue exceeded the target revenue for the first half of 2013, as defined by the purchase agreement, and were issued under the Company’s current long-term incentive plan. The stock options are subject to all vesting restrictions and other terms and conditions customary for the Company.

The Company performed a valuation analysis to determine the fair values of certain intangible assets of Empathy Lab as of the acquisition date. As part of the valuation process, the excess earnings method was used to determine the value of customer relationships. Fair values of trade name and non-competition agreements were determined using the relief from royalty and discounted earnings methods, respectively. The Company expects approximately $11,470 of tax goodwill amortizable over a 15-year period.

The following table presents the estimated fair values and useful lives of intangible assets acquired as of December 18, 2012:

	Weighted Average Useful Life (in years)		Amount
Customer relationships		10	$	6,900
Trade names		5		3,900
Non-competition agreements		4		400
Total			$	11,200

Included in consolidated statements of income and comprehensive income for the year ended December 31, 2012 were $545 of revenues and $104 of net income of the acquiree, respectively.

Total acquisition-related post-combination compensation expense recognized for the year ended December 31, 2012 was $79 and is presented within selling, general and administrative expenses. Total acquisition-related costs were $81 and are presented within selling, general and administrative expenses for the year ended December 31, 2012, respectively.

Pro forma results of operations for the Empathy Lab acquisition completed during the year ended December 31, 2012 have not been presented because the effects of the acquisition were not material, individually and in aggregate with other acquisitions completed by the Company during 2012, to the Company’s consolidated results of operations.

Thoughtcorp, Inc. — On May 23, 2012, the Company acquired substantially all of the assets and assumed certain liabilities of Thoughtcorp, Inc., a Toronto-based software solutions provider (“Thoughtcorp”). The acquisition is intended to expand the Company’s geographic footprint within North America, and complement its global delivery capabilities with expertise in areas such as agile development, enterprise mobility and business intelligence. In addition, Thoughtcorp brings significant telecommunications expertise, and expands and enhances the Company’s offering within the Banking and Financial Services and Travel and Consumer verticals.

The purchase price was comprised of $7,497 paid in cash and 217,274 shares of common stock with a fair value of $3,607 at the acquisition date. Half of these shares were placed in escrow for a period of 18 months as a security for the indemnification obligations of the sellers under the asset purchase agreement. Additionally, the Company issued to the sellers 217,272 shares of non-vested (“restricted”) common stock contingent on their continued employment with the Company (Note 14). These shares have an estimated value of $3,607 and will be recorded as stock-based compensation expense over an associated service period of two years. A deferred tax asset has been recognized for the tax effect of the fair value of the portion of the shares that were placed in escrow.

The purchase price was allocated to the assets acquired based on their related fair values, as follows:

	Amount
Cash and cash equivalents	$	1,111
Trade receivables and other current assets		2,484
Property and equipment		92
Deferred tax asset		1,348
Acquired intangible assets		5,296
Goodwill		2,935
Total assets acquired		13,266
Accounts payable and accrued expenses		461
Assumed shareholder and director loans		1,290
Deferred revenue and other liabilities		411
Total liabilities assumed		2,162
Net assets acquired	$	11,104

The Company performed a valuation analysis to determine the fair values of certain intangible assets of Thoughtcorp as of the acquisition date. As part of the valuation process, the excess earnings method was used to determine the value of customer relationships. Fair values of trade name and non-competition agreements were determined using the relief from royalty and discounted earnings methods, respectively. The Company expects approximately $8,310 of tax goodwill, of which 75% is deductible at 7% per annum on a declining basis.

The following table presents the fair values and useful lives of intangible assets acquired as of May 23, 2012:

	Weighted Average Useful Life (in years)		Amount
Customer relationships		10	$	2,810
Trade names		5		2,014
Non-competition agreements		5		472
Total			$	5,296

Included in consolidated statements of income for the year ended December 31, 2012 were $7,184 of revenues and $206 of net losses of the acquiree, respectively.

Total acquisition-related post-combination compensation expense recognized for the year ended December 31, 2012 was $1,252 and is presented within selling, general and administrative expenses. Total acquisition-related costs were $420 and are presented within selling, general and administrative expenses for the year ended December 31, 2012, respectively.

Pro forma results of operations for the Thoughtcorp acquisition completed during the year ended December 31, 2012 have not been presented because the effects of the acquisition, individually and in aggregate with other acquisitions completed by the Company during 2012, were not material to the Company’s consolidated results of operations.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph F4
-Subparagraph e
-Appendix F

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

GOODWILL AND INTANGIBLE ASSETS - NET

12 Months Ended

Dec. 31, 2012

GOODWILL AND INTANGIBLE ASSETS - NET [Abstract]

GOODWILL AND INTANGIBLE ASSETS - NET

3.	GOODWILL AND INTANGIBLE ASSETS — NET

Goodwill by reportable segment was as follows:

	North America			EU		Russia			Other		Total
Balance as of January 1, 2012	$	2,286		$	2,864	$	3,019		$	—	$	8,169
Acquisition of Thoughtcorp (Note 2)		2,935			—		—			—		2,935
Acquisition of Empathy Lab (Note 2)		11,359			—		—			—		11,359
Effect of net foreign currency exchange rate changes		63			—		172			—		235
Balance as of December 31, 2012		16,643			2,864		3,191			—		22,698
Effect of net foreign currency exchange rate changes		(205	)		—		(225	)		—		(430	)
Balance as of December 31, 2013	$	16,438		$	2,864	$	2,966		$	—	$	22,268

As a result of an operating loss in the Other reporting unit for the three months ended June 30, 2011, the Company performed a goodwill impairment test. In assessing impairment in accordance with Accounting Standards Codification, (“ASC”) No. 350, “Intangibles-Goodwill and Other,” the Company determined that the fair value of the Other reporting unit, based on the total of the expected future discounted cash flows directly related to the reporting unit, was below the carrying value of the reporting unit. The Company completed the second step of the goodwill impairment test, resulting in an impairment charge of $1,697. There were no accumulated impairments losses in any of the North America, Europe or Russia segments as of December 31, 2013, 2012 or 2011.

As part of the Thoughtcorp acquisition, substantially all of the employees of the acquiree accepted employment with the Company. The Company believes the amount of goodwill resulting from the allocation of purchase price to acquire Thoughtcorp is attributable to the workforce of the acquired business. All of the goodwill was allocated to the Company’s Canadian operations and is presented within North America.

As part of the Empathy Lab acquisition, substantially all of the employees of the acquiree accepted employment with the Company. The Company believes the amount of goodwill resulting from the allocation of purchase price to acquire Empathy Lab is attributable to the workforce of the acquired business. All of the goodwill was allocated to the Company’s U.S. operations and is presented within North America.

Components of intangible assets were as follows:

	2013
	Weighted average life at acquisition (in years)		Gross carrying amount		Accumulated amortization			Net carrying amount
Client relationships		9	$	13,432	$	(4,885	)	$	8,547
Trade name		5		6,232		(1,643	)		4,589
Non-competition agreements		5		848		(250	)		598
Total			$	20,512	$	(6,778	)	$	13,734

	2012
	Weighted average life at acquisition (in years)		Gross carrying amount		Accumulated amortization			Net carrying amount
Client relationships		9	$	13,724	$	(3,640	)	$	10,084
Trade name		5		6,372		(439	)		5,933
Non-competition agreements		5		881		(64	)		817
Total			$	20,977	$	(4,143	)	$	16,834

All of the intangible assets have finite lives and as such are subject to amortization. Amortization of intangibles for the years ended December 31 is presented in the table below:

	Year Ended December 31,
	2013		2012		2011
Client relationships	$	1,373	$	627	$	720
Trade name		1,222		333		59
Non-competition agreements		190		64		—
Total	$	2,785	$	1,024	$	779

Estimated amortization expenses of the Company’s existing intangible assets for the next five years ending December 31, were as follows:

	Amount
2014	$	2,503
2015		2,376
2016		2,341
2017		1,865
2018		977
Thereafter		3,672
Total	$	13,734

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

PREPAID AND OTHER CURRENT ASSETS

12 Months Ended

Dec. 31, 2012

PREPAID AND OTHER CURRENT ASSETS [Abstract]

PREPAID AND OTHER CURRENT ASSETS

4. PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consisted of the following:

	December 31, 2013		December 31, 2012
Taxes receivable	$	7,295	$	4,522
Prepaid expenses		3,399		3,825
Security deposits under operating leases		1,005		837
Prepaid equipment		986		1,695
Unamortized software licenses and subscriptions		981		616
Due from employees		218		104
Other		471		236
Total	$	14,355	$	11,835

EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES

12 Months Ended

Dec. 31, 2012

EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES [Abstract]

EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES

5. EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES

In the third quarter of 2012, the Board of Directors of the Company approved the Employee Housing Program (“the Housing Program”), which assists employees in purchasing housing in Belarus. The Housing Program was designed to be a retention mechanism for the Company’s employees in Belarus and is available to full-time employees who have been with the Company for at least three years. As part of the Housing Program, the Company will extend financing to employees up to an aggregate amount of $10,000. The Company does not bear any market risk in connection with the Housing Program, as the housing will be sold directly to employees by independent third parties. In addition to the housing loans, the Company issues relocation loans in connection with intra-company transfers, as well as certain other individual loans.

During the year ended December 31, 2013, loans issued by the Company under the Housing Program were denominated in U.S. Dollars with a five-year term and carried an interest rate of 7.5%.

At December 31, 2013 and December 31, 2012, categories of employee loans included in the loan portfolio were as follows:

	December 31, 2013		December 31, 2012
Housing loans	$	5,896	$	—
Relocation and other loans		494		429
Total employee loans		6,390		429
Less:
Allowance for loan losses		—		—
Total loans, net of allowance for loan losses	$	6,390	$	429

There were no loans issued to principal officers, directors, and their affiliates during the years ended December 31, 2013, 2012 and 2011.

On a quarterly basis, the Company reviews the aging of its loan portfolio to evaluate information about the ability of employees to service their debt, including historical payment experience, reasons for payment delays and shortfalls, if any, as well as probability of collecting scheduled principal and interest payments based on the knowledge of individual borrowers, among other factors.

As of December 31, 2013 and December 31, 2012, there were no material past due or non-accrual employee loans. The Company determined no allowance for loan losses was required regarding its employee loans as of December 31, 2013 and December 31, 2012, and there were no movements in provision for loan losses during the years ended December 31, 2013, 2012 and 2011.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=7512638&loc=d3e5066-111524

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3,4)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=7512638&loc=d3e5162-111524

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=7512638&loc=d3e5074-111524

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 3, 4
-Article 5

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 7
-Article 9

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph k
-Article 4

+ Details

RESTRICTED CASH AND TIME DEPOSITS

12 Months Ended

Dec. 31, 2012

RESTRICTED CASH AND TIME DEPOSITS [Abstract]

RESTRICTED CASH AND TIME DEPOSITS

6. RESTRICTED CASH AND TIME DEPOSITS

Restricted cash and time deposits consisted of the following:

	December 31, 2013		December 31, 2012
Time deposits	$	1,188	$	1,006
Short-term security deposits under customer contracts		298		660
Long-term deposits under employee loan programs		225		360
Long-term deposits under operating leases		—		107
Total	$	1,711	$	2,133

Included in time deposits as of December 31, 2013, was a bank deposit of $1,188. The deposit matures on October 15, 2014 and earns interest at the rate of 2.05%. The Company does not intend to withdraw the deposit prior to its maturity.

Included in time deposits as of December 31, 2012, was a bank deposit of $1,006, which earned interest at the rate of 2.95%. The deposit matured in September 2013.

At December 31, 2013 and 2012 short-term security deposits under customer contracts included fixed amounts placed in connection with bank guarantees to secure appropriate performance by the Company. The Company estimates the probability of non-performance under these contracts as remote therefore, no provision for losses has been recognized in respect of these amounts as of December 31, 2013 and 2012.

Also included in restricted cash as of December 31, 2013 and 2012 were deposits of $225 and $360, respectively, placed in connection with certain employee loan programs (See Note 16).

- Definition

The entire disclosure for cash and cash equivalent footnotes, which may include the types of deposits and money market instruments, applicable carrying amounts, restricted amounts and compensating balance arrangements. Cash and equivalents include: (1) currency on hand (2) demand deposits with banks or financial institutions (3) other kinds of accounts that have the general characteristics of demand deposits (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments maturing within three months from the date of acquisition qualify.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6367179&loc=d3e4273-108586

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.1)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 6.H.3)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13728-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Cash Equivalents
-URI http://asc.fasb.org/extlink&oid=6507016

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Cash
-URI http://asc.fasb.org/extlink&oid=6506951

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 7
-Footnote 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 6
-Section H
-Subsection 3

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 1
-Article 5

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 8, 9, 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

PROPERTY AND EQUIPMENT - NET

12 Months Ended

Dec. 31, 2012

PROPERTY AND EQUIPMENT - NET [Abstract]

PROPERTY AND EQUIPMENT - NET

7. PROPERTY AND EQUIPMENT — NET

Property and equipment consisted of the following:

	Useful Life (in years)		December 31, 2013			December 31, 2012
Computer hardware		3	$	29,884		$	24,239
Leasehold improvements	lease term			5,903			5,527
Furniture and fixtures		7		5,688			4,351
Purchased computer software		3		5,042			4,452
Office equipment		7		4,679			4,325
Building		50		16,534			16,534
Construction in progress (Note 16)		n/a		15,749			15,561
				83,479			74,989
Less accumulated depreciation and amortization				(30,164	)		(21,854	)
Total			$	53,315		$	53,135

Depreciation and amortization expense related to property and equipment was $12,335, $9,858 and $6,759 for the years ended December 31, 2013, 2012 and 2011, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

ACCRUED EXPENSES AND OTHER LIABILITIES

12 Months Ended

Dec. 31, 2012

ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]

ACCRUED EXPENSES AND OTHER LIABILITIES

8.	ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses consisted of the following:

	December 31, 2013		December 31, 2012
Compensation	$	13,674	$	15,450
Subcontractor costs		2,933		1,915
Professional fees		947		544
Facilities costs		334		297
Other		2,287		1,608
Total	$	20,175	$	19,814

TAXES PAYABLE

12 Months Ended

Dec. 31, 2012

TAXES PAYABLE [Abstract]

TAXES PAYABLE

9.	TAXES PAYABLE

Current taxes payable consisted of the following:

	December 31, 2013		December 31, 2012
Corporate profit tax	$	3,717	$	3,315
Value added taxes		5,975		6,274
Payroll, social security, and other taxes		4,479		4,968
Total	$	14,171	$	14,557

As of December 31, 2013 and 2012, long-term taxes payable included amounts in respect of unrecognized tax benefits and related interest.

INCOME TAXES

12 Months Ended

Dec. 31, 2012

INCOME TAXES [Abstract]

INCOME TAXES

10. INCOME TAXES

Income before provision for income taxes shown below was based on the geographic location to which such income was attributed as follows:

	Year Ended December 31,
	2013		2012		2011
Income before income tax expense:
Domestic	$	7,001	$	9,291	$	2,872
Foreign		69,769		56,572		49,920
Total	$	76,770		65,863	$	52,792

	Year Ended December 31,
	2013			2012			2011
Income tax expense/ (benefit) consists of:
Current
Federal	$	6,150		$	6,881		$	4,878
State		310			319			389
Foreign		8,275			7,969			2,483
Deferred
Federal		(668	)		(625	)		(1,629	)
State		14			24			(72	)
Foreign		695			(3,189	)		2,390
Total	$	14,776		$	11,379		$	8,439

Deferred tax assets and liabilities are provided for the effects of temporary differences between the tax basis of an asset and liability and its reported amount in the consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years.

The components of the Company’s deferred tax assets and liabilities were as follows:

	December 31, 2013		December 31, 2012
Deferred tax assets:
Fixed assets	$	732	$	703
Intangible assets		4,532		4,737
Accrued expenses		3,488		4,042
Deferred revenue		2,050		1,583
Stock-based compensation		407		413
Valuation allowance		—		(489	)
Restricted stock options		1,336		1,616
Other assets		680		1,214
Deferred tax assets		13,225		13,819
Deferred tax liabilities:
Fixed assets		804		742
Accrued revenue and expenses		846		737
Deferred intercompany gain		405		405
Equity compensation		1,593		2,431
Other liabilities		254		—
Deferred tax liability		3,902		4,315
Net deferred tax asset	$	9,323	$	9,504

At December 31, 2013, the Company had current and non-current deferred tax assets of $5,392 and $4,557, respectively, and current and non-current tax liabilities of $275 and $351, respectively. At December 31, 2012, the Company had current and non-current deferred tax assets of $6,593 and $6,093, respectively and current and non-current tax liabilities of $491 and $2,691, respectively.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the amount of tax holiday the company can use in Hungary before the credit expires in that jurisdiction in 2015. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth.

On the basis of this evaluation, as of December 31, 2013, no valuation allowance is required to record the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

At December 31, 2013, the Company had utilized all of its federal net operating losses. No provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such earnings. As of December 31, 2013, certain subsidiaries had approximately $249.6 million of undistributed earnings that we intend to permanently reinvest. A liability could arise if our intention to permanently reinvest such earnings were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries.

The provision for income taxes differs from the amount of income tax determined by applying the applicable US statutory federal income tax rate to pretax income as follows:

	Year Ended December 31,
	2013			2012			2011
Statutory federal tax	$	26,102		$	22,393		$	18,482
Increase/ (decrease) in taxes resulting from:
State taxes, net of federal benefit		368			280			266
Provision adjustment for current year uncertain tax position		—			—			178
Effect of permanent differences		2,524			2,177			2,816
Stock-based compensation		1,948			1,165			—
Rate differential between U.S. and foreign		(17,279	)		(14,472	)		(13,297	)
Change in foreign tax rate		(59	)		148			(22	)
Change in valuation allowance		489			(489	)		—
Other		683			177			16
Income tax expense	$	14,776		$	11,379		$	8,439

The growth in the permanent differences in the year ended December 31, 2012 related to goodwill impairment loss and increases in non-deductible expenses incurred by foreign subsidiaries.

On September 22, 2005, the president of Belarus signed the decree “On the High-Technologies Park” (the “Decree”). The Decree is aimed at boosting the country’s high-technology sector. The Decree stipulates that member technology companies have a 100% exemption from Belarusian income tax of 18% effective July 1, 2006. The Decree is in effect for a period of 15 years from date of signing.

The Company’s subsidiary in Hungary benefits from a tax credit of 10% of annual qualified salaries, taken over a four-year period, for up to 70% of the total tax due for that period. The Company has been able to take the full 70% credit for 2008 - 2013. The Hungarian tax authorities repealed the tax credit beginning with 2012. Credits earned in years prior to 2012, will be allowed until fully utilized. The Company anticipates full utilization up to the 70% limit until 2014, with full phase out in 2015.

The aggregate dollar benefits derived from these tax holidays approximated $9.7 million, $8.5 million and $21.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. The decrease in aggregate dollar benefits derived from these tax holidays in 2013, as compared to 2012, was primarily due to a decrease in statutory tax rate in Belarus. The benefit the tax holiday had on diluted net income per share approximated $0.20, $0.19 and $0.49 for the years ended December 31, 2013, 2012 and 2011, respectively.

The liability for unrecognized tax benefits is included in income tax liability within the consolidated balance sheets at December 31, 2013 and 2012. At December 31, 2013 and 2012, the total amount of gross unrecognized tax benefits (excluding the federal benefit received from state tax positions) was $1,271 and $1,271, respectively, (excluding penalties and interest of $189 and $125, respectively). Of this total, $1,328 and $1,354, respectively, (net of the federal benefit on state tax issues) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in future periods.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of its provision for income taxes. The total amount of accrued interest and penalties resulting from such unrecognized tax benefits was $189, $125 and $55 at December 31, 2013, 2012 and 2011, respectively.

The beginning to ending reconciliation of the gross unrecognized tax benefits were as follows:

	2013		2012		2011
Gross Balance at January 1	$	1,271	$	1,271	$	56
Increases in tax positions in current year		—		—		178
Increases in tax positions in prior year		—		—		1,093
Decreases due to settlement		—		—		(56	)
Balance at December 31	$	1,271	$	1,271	$	1,271

There were no tax positions for which it was reasonably possible that unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date.

The Company files income tax returns in the United States and in various states, local and foreign jurisdictions. The Company’s significant tax jurisdictions are the U.S. Federal, Pennsylvania, Canada, Russia, Denmark, Germany, Ukraine, the United Kingdom, Hungary, Switzerland and Kazakhstan. The tax years subsequent to 2009 remain open to examination by the Internal Revenue Service. Generally, the tax years subsequent to 2009 remain open to examination by various state and local taxing authorities and various foreign taxing authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

+ Details

EMPLOYEE BENEFITS	12 Months Ended
EMPLOYEE BENEFITS	Dec. 31, 2012
EMPLOYEE BENEFITS [Abstract]
EMPLOYEE BENEFITS	11. EMPLOYEE BENEFITS The Company has established a 401(k) retirement plan, which is a tax-qualified self-funded retirement plan covering substantially all of the Company’s U.S. employees. Under this plan, employees may elect to defer their current compensation by up to the statutory limit. Effective January 1, 2013, the Company provides discretionary matching contributions to the plan up to a maximum of 2.0% of the employee’s eligible compensation. Employer contributions charged to expense for the year ended December 31, 2013 were $404. The Company does not maintain any defined benefit pension plans or any nonqualified deferred compensation plans.

LONG-TERM DEBT	12 Months Ended
LONG-TERM DEBT	Dec. 31, 2012
LONG-TERM DEBT [Abstract]
LONG-TERM DEBT	12. LONG-TERM DEBT Revolving Line of Credit — In November 2006, the Company entered into a revolving loan agreement (the “Credit Facility”) with PNC Bank, National Association (the “Bank”). The Credit Facility was comprised of a five-year revolving line of credit pursuant to which the Company could borrow up to $7,000 at any point in time based on borrowing availability at an annual rate equal to the London Interbank Offer Rate, or LIBOR, plus 1.25%. The borrowing availability under the Credit Facility was based upon a percentage of eligible accounts receivable and US cash. On July 25, 2011, the Company and the Bank agreed to amend the Credit Facility to increase the maximum borrowing capacity to $30,000. On January 15, 2013, the Company entered into a new revolving loan agreement (the “2013 Credit Facility”) with the Bank, which expires on January 15, 2015. Under the new agreement, the Company’s maximum borrowing capacity was set at $40,000. Advances under the new line of credit accrue interest at an annual rate equal to the LIBOR, plus 1.25%. The 2013 Credit Facility is collateralized with: (a) all tangible and intangible assets of the Company, and its U.S.-based subsidiaries including all accounts, general intangibles, intellectual property rights, equipment; and (b) all of the outstanding shares of capital stock and other equity interests in U.S.-based subsidiaries of the Company, and 65.0% of the outstanding shares of capital stock and other equity interests in certain of the Company’s foreign subsidiaries. As of December 31, 2013, the borrowing capacity of the Company under the 2013 Credit Facility was $40,000. The 2013 Credit Facility contains customary affirmative and negative covenants, including financial and coverage ratios. As of December 31, 2013, the Company was in compliance with all debt covenants as of that date. As of December 31, 2013 and 2012, the Company had no outstanding borrowing.

COMMON AND PREFERRED STOCK

12 Months Ended

Dec. 31, 2012

COMMON AND PREFERRED STOCK [Abstract]

COMMON AND PREFERRED STOCK

13. COMMON AND PREFERRED STOCK

On January 19, 2012, the Company effected an 8-for-1 stock split of the Company’s common stock, on which date the number of authorized common and preferred stock was increased to 160,000,000 and 40,000,000 shares, respectively. All shares of common stock, options to purchase common stock and per share information presented in the consolidated financial statements have been adjusted to reflect the stock split on a retroactive basis for all periods presented. There was no change in the par value of the Company’s common stock. The ratio by which the then outstanding shares of Series A-1 Preferred, Series A-2 Preferred and Series A-3 Preferred Stock were convertible into shares of common stock was adjusted to reflect the effects of the common stock split, such that each share of preferred stock was convertible into eight shares of common stock.

In February 2012, the Company completed an initial public offering of 6,900,000 shares of its common stock, which included 900,000 shares of common stock sold by the Company pursuant to an over-allotment option granted to the underwriters, which were sold at a price to the public of $12.00 per share. The offering commenced on February 7, 2012 and closed on February 13, 2012. Of the 6,900,000 shares of common stock sold, the Company issued and sold 2,900,000 shares of common stock and its selling stockholders sold 4,000,000 shares of common stock, resulting in gross proceeds to the Company of $34,800 and $28,969 in net proceeds after deducting underwriting discounts and commissions of $2,436 and offering expenses of $3,395. The Company did not receive any proceeds from the sale of common stock by the selling stockholders.

On August 20, 2010, the Company entered into an agreement with Instant Information Inc. to issue shares of common stock to Instant Information Inc. as consideration for the acquisition of the assets of Instant Information Inc. subject to achievement of certain financial milestones or upon completion of an initial public offering by the Company. A total of 53,336 shares of common stock were issued to Instant Information Inc. upon completion of the Company’s initial public offering for an aggregate value of $640, which was expensed during the first quarter of 2012.

Upon the closing of the initial public offering, all outstanding Series-A1 and Series-A2 convertible redeemable preferred stock, and Series A3 convertible preferred stock were converted into a total of 21,840,128 shares of common stock, as shown in the table below.

	Conversion Shares
Series A-1 Convertible Redeemable Preferred Stock		16,439,480
Series A-2 Convertible Redeemable Preferred Stock		3,078,432
Series A-3 Convertible Preferred Stock		2,322,216
Total		21,840,128

Series A-1 Convertible Redeemable Preferred Stock (“Series A-1 Preferred”) — On January 20, 2006, Siguler Guff LLC, a New York based private equity investment firm, acting through its affiliated investment funds Russia Partners II LP (“RPII”) and Russia Partners EPAM Fund LP (“RPE”), purchased 657,354 shares of Series A-1 Preferred at $12.17 per share or $8,000. At the same time, RPII and RPE also acquired 11,180,648 shares of the Company’s common stock from existing holders, and the Company enabled RPII and RPE to convert such shares into 1,397,581 shares of Series A-1 Preferred. The difference between the share price of the Series A-1 Preferred ($12.17 per share) and the common stock ($1.13 per share) exchanged of $6,803 has been recorded as a deemed dividend. The Company accreted the 12.5% compounded annual rate of return through April 15, 2010, in accordance with the redemption provision as detailed below. There was no accretion for the years ended December 31, 2013, 2012 and 2011. The ending redemption value was $41,245 at December 31, 2011.

The terms of the Series A-1 Preferred were as follows:

Dividends — No dividends will be paid on the Series A-1 Preferred unless dividends are paid on common stock.

Liquidation — Before any payment to the common stockholders, the Series A-1 Preferred will receive their purchase price of the Series A-1 Preferred ($12.17 per share) plus a 12.5% compounded annual rate of return on the purchase price.

If the assets distributable to the holders of the Series A Preferred upon a liquidation are insufficient to pay the full Series A-1, A-2 and A-3 Preferred liquidation amounts, then such assets or the proceeds shall be distributed among the holders of the Series A-1, A-2 and A-3 Preferred ratably in proportion to the respective amount to which they otherwise would be entitled.

The liquidation amount is equal to the carrying value for all periods presented.

Redemption — At any time after January 1, 2011, if the Company has not affected a qualified public offering, as defined, the holders of at least a majority of the then outstanding shares of Series A-1 Preferred, voting together as a separate class, may by written request, require the Company to redeem all or any number of shares of the Series A-1 Preferred in four equal semi-annual installments beginning thirty calendar days from the date of the redemption election and ending on the date one and one-half years after such date. The Company shall affect such redemptions on the applicable redemption date by paying in cash in exchange for each share of Series A-1 Preferred to be redeemed then outstanding an amount equal to the Series A-1 Preferred liquidation amount ($12.17 per share plus a 12.5% compounded annual rate of return) on such redemption date.

Pursuant to section 6.8 of the Series A-3 convertible preferred stock purchase agreement, the 12.5% compounded annual return related to the Series A-1 Preferred, which has been part of the Series A-1 liquidation amount, ceases after the date of issuance of the Series A-3 Preferred. EPAM terminated the accretion related to this liquidation amount on or about April 15, 2010.

Voting — Each holder of a share of Series A-1 Preferred shall be entitled to voting rights and powers equal to the voting rights and powers of the common stock (except as otherwise expressly provided or as required by law) voting together with the common stock as a single class on an as-converted to common stock basis. Each share of Series A-1 Preferred (including fractional shares) shall be entitled to one vote for each whole share of common stock that would be issuable upon conversion of such shares on the record date for determining eligibility to participate in the action being taken.

Conversion Rights — Any holder of Series A-1 Preferred may convert any share of Series A-1 Preferred held by such holder into a number of shares of common stock determined by dividing (i) the Series A-1 Preferred purchase price ($12.17 per share) by (ii) the Series A-1 conversion price then in effect. The initial conversion price for the Series A-1 Preferred (the “Series A-1 Conversion Price”) shall be equal to the purchase price ($12.17 per share). The Series A-1 Conversion Price from time to time in effect is subject to adjustment, as defined. Each share of Series A-1 Preferred shall automatically be converted into shares of common stock at the then effective applicable Series A-1 Conversion Price upon the earliest of (i) the date specified by vote or written consent or agreement of holders of at least a majority of the shares of Series A-1 Preferred then outstanding, (ii) effective immediately before a qualified public offering, as defined, or (iii) effective upon the closing of a liquidation or a reorganization event, as defined, that results in the receipt of a per share amount of cash proceeds or non-cash property valued equal to or greater than the Series A-1 Preferred liquidation amount, as defined.

Series A-2 Convertible Redeemable Preferred Stock (“Series A-2 Preferred”) — On February 19, 2008, the Company completed a private placement and raised net proceeds of $47,601 ($50,000 gross less $2,399 costs) from the sale of 675,081 shares of Series A-2 Preferred at a sale price of $74.07 per share. Annual accretion was $0, $0 and $17,563 for the years ended December 31, 2013, 2012 and 2011, respectively. The ending carrying value was $0, $0 and $44,695 at December 31, 2013, 2012 and 2011, respectively.

In connection with this private placement, the Company designated the Series A-2 Preferred as a new series of preferred stock and renamed the existing series of shares of Series A preferred stock as Series A-1 Preferred.

On January 19, 2010, the Company entered into a stock repurchase agreement with certain stockholders to repurchase 290,277 of Series A-2 Convertible Redeemable Preferred Stock at a per share price of $51.85 for a total consideration of $15,050. On November 10, 2010, Board of Directors of the Company voted to retire these shares.

The Series A-2 Preferred shares had the following rights and preferences:

Dividends — No dividends will be paid on the Series A-2 Preferred unless dividends are paid on common stock.

Liquidation — Before any payment to the common stockholders, the Series A-2 Preferred holders will receive their liquidation preference.

In the event of any liquidation that values 100% of the equity securities of the Company on a fully-diluted basis at an amount that is less than the Series A-2 post-money valuation, as defined, the holders of shares of Series A-2 Preferred shall be entitled to receive either their per share purchase price of the Series A-2 Preferred ($74.07) plus a 12.5% compounded annual rate of return if the purchase price is less than the percentage ceiling amount, defined for purposes of liquidation as 17.1% of cash proceeds or non-cash property received by the Company in the event of any liquidation, or the greater of (1) $74.07 per share and (2) the percentage ceiling amount.

In the event of liquidation that values 100% of the equity securities of the Company on a fully-diluted basis at an amount that is equal to or greater than the Series A-2 post-money valuation, as defined, the holders of shares of Series A-2 Preferred shall be entitled to receive either their per share purchase price of the Series A-2 Preferred ($74.07) plus a 12.5% to 18% compounded annual rate of return on the purchase price, if greater than the percentage ceiling amount, or the percentage ceiling amount.

Redemption — At any time before January 1, 2011, if the Company has not effected a qualified public offering, as defined, the holders of at least a majority of the then outstanding shares of Series A-2 Preferred, may, by written request, require the Company to redeem all or any number of shares of the Series A-2 Preferred in three equal installments payable no later than the 12th, 18th and 24th month following the date of the redemption election. The Company shall effect such redemptions on the applicable redemption date by paying in cash in exchange for each shares of Series A-2 Preferred to be redeemed then outstanding, a per share amount equal to the lesser of (x) an amount that would provide a compounded annual return of 12.5% from the date of initial issuance date and (y) the percentage ceiling amount. At any time on or after January 1, 2011, the redemption per share amount is equal to the lesser of (x) the hurdle amount, an amount that would provide an annual IRR, as defined, from the initial issuance date of such share of at least 17%, provided, however, that the hurdle amount, as defined, shall cease to compound after December 31, 2010 and (y) the percentage ceiling amount, as defined. The percentage ceiling amount means, initially, 17.1% and thereafter adjusted pro rata for any changes in the percentage of capital stock of the Company owned by the holders of shares of Series A-2 Preferred (on a fully diluted basis) multiplied by the aggregate value of all Common Stock (assuming conversion of the Series A Preferred) as reasonably determined by the Board in good faith.

Voting — Each holder of a Series A-2 Preferred shall be entitled to voting rights and powers equal to the voting rights and powers of common stock (except as otherwise expressly provided or as required by law) voting together with the common stock as a single class on an as-converted to common stock basis. Each share of Series A-2 Preferred (including fractional shares) shall be entitled to one vote for each whole share of common stock that would be issuable upon conversion of such shares on the record date for determining eligibility to participate in the action being taken.

Conversion rights — Any holder of Series A-2 Preferred may convert any share of Series A-2 Preferred held by such holder into a number of shares of common stock determined by dividing (i) the Series A-2 Preferred purchase price ($74.07 per share) by (ii) the Series A-2 conversion price then in effect. The initial conversion price for the Series A-2 Preferred (the “Series A-2 Conversion Price”) shall be equal to the purchase price ($74.07 per share). The Series A-2 Conversion Price from time in effect is subject to adjustment, as defined. Each share of Series A-2 Preferred shall automatically be converted into shares of common stock at the then effective applicable Series A-2 Conversion Price upon the earliest of (i) the date specified by vote or written consent or agreement of holders of at least a majority of the shares of Series A-2 Preferred then outstanding, (ii) effective immediately before a qualified public offering, as defined. or (iii) effective upon the closing of a liquidation or a reorganization event, as defined, that results in the receipt per share of amount of cash proceeds or non-cash property valued equal to or greater than, the lesser of (x) their purchase price of the Series A-2 Preferred ($74.07 per share) plus a 12.5% compounded annual rate of return on the purchase price and (y) the percentage ceiling amount, as defined.

Registration Rights — The holders of at least majority of the Series A-2 Preferred holders, may, by written request, require the Company to file a registration statement with certain limitations.

Series A-3 Convertible Preferred Stock (“Series A-3 Preferred”) — On April 15, 2010, the Company created and issued 290,277 shares of Series A-3 Preferred at $51.85 per share, for a total consideration of $14,971, net of costs.

The Series A-3 Preferred had the following rights and preferences:

Dividends — No dividends will be paid on the Series A-3 Preferred unless dividends are paid on common stock.

Liquidation — Before any payment to the common stockholders, the Series A-3 Preferred holders will receive their liquidation preference.

In the event of liquidation that values 100% of the equity securities of the Company on a fully-diluted basis at an amount that is equal to or greater than the Series A-3 liquidation amount, as defined, the holders of shares of Series A-3 Preferred shall be entitled to receive their pro rata portion based on the per share amount available to common stockholders.

If the assets distributable to the holders of the Series A Preferred upon a liquidation are insufficient to pay the full Series A-1,

A-2 and A-3 Preferred liquidation amounts, then such assets or the proceeds shall be distributed among the holders of the Series A-1, A-2 and A-3 Preferred ratably in proportion to the respective amount to which they otherwise would be entitled.

The liquidation amount is equal to the carrying value for all periods presented.

Voting — Each holder of a Series A-3 Preferred shall be entitled to voting rights and powers equal to the voting rights and powers of common stock (except as otherwise expressly provided or as required by law) voting together with the common stock as a single class on an as-converted to common stock basis. Each share of Series A-3 Preferred (including fractional shares) shall be entitled to one vote for each whole share of common stock that would be issuable upon conversion of such shares on the record date for determining eligibility to participate in the action being taken.

Conversion rights — Any holder of Series A-3 Preferred may convert any share of Series A-3 Preferred held by such holder into a number of shares of common stock determined by dividing (i) the Series A-3 Preferred purchase price ($51.85 per share) by (ii) the Series A-3 conversion price then in effect. The initial conversion price for the Series A-3 Preferred (the “Series A-3 Conversion Price”) shall be equal to the purchase price ($51.85 per share). The Series A-3 Conversion Price from time in effect is subject to adjustment, as defined. Each share of Series A-3 Preferred shall automatically be converted into shares of common stock at the then effective applicable Series A-3 Conversion Price upon the earliest of (i) the date specified by vote or written consent or agreement of holders of at least a majority of the shares of Series A-3 Preferred then outstanding, (ii) effective immediately before a qualified public offering, as defined, or (iii) effective upon the closing of a liquidation or a reorganization event, as defined.

Registration Rights — The holders of at least a majority of the Series A-3 Preferred holders, may, by written request, require the Company to file a registration statement with certain limitations.

Puttable Stock — As part of consideration paid in business combinations, the Company issued common stock to certain stockholders of the acquired companies. The shares had an attached Put Option that provided the holders with the right to put the shares at the original per share value in the event the Company did not have a qualified public offering or reorganization event within a specified period from the acquisition date. During 2011, put options in respect of 56,896 of puttable common stock expired unexecuted.

Treasury Stock — During the years ended December 31, 2013 and 2012, the Company issued treasury stock in connections with acquisitions completed in 2012 (See Note 2). In addition, in May 2012, Board of Directors of the Company voted to retire 38,792 shares of its treasury stock.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Section B
-Paragraph 7, 11A
-Chapter 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
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-Paragraph 29, 30, 31
-Article 5

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 23: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

STOCK COMPENSATION

12 Months Ended

Dec. 31, 2012

STOCK COMPENSATION [Abstract]

STOCK COMPENSATION

14. STOCK COMPENSATION

The following costs related to the Company’s stock compensation plans were included in the consolidated statements of income and comprehensive income:

	Year Ended December 31,
	2013		2012		2011
Cost of revenues	$	4,823	$	2,809	$	1,365
Selling, general and administrative		8,327		4,017		1,501
Total	$	13,150	$	6,826	$	2,866

During the second quarter of 2013, the Company finalized the fair values of the net assets acquired from Empathy Lab (See Note 2). As a result, the Company issued an additional 1,483 shares of non-vested (“restricted”) common stock to the sellers of Empathy Lab on July 11, 2013 to settle the difference between the initial number of shares issued upon acquisition and the total number of shares due in connection with this transaction. The shares vest 33.33% on each of the first, second and third anniversaries of the closing date. Upon termination of the recipient’s services with the Company with Cause or without Good Reason (in each case, as defined in the escrow agreement), any unvested shares will be forfeited. The fair value of the restricted shares at the time of grant was $42.

2012 Non-Employee Directors Compensation Plan—On January 11, 2012, the Company approved the 2012 Non-Employee Directors Compensation Plan (“2012 Directors Plan”), which will be used to issue equity grants to its non-employee directors. The Company authorized 600,000 shares of common stock to be reserved for issuance under the plan. The 2012 Directors Plan will expire after ten years and will be administered by the Company’s Board of Directors.

On January 8, 2013, the Company issued 5,257 shares of non-vested (“restricted”) common stock to its new non-employee director under the 2012 Directors Plan. The shares will vest and become unforfeitable 25% on each of the first, second, third and fourth anniversaries of the grant date. Upon termination of service from the Board at any time, a portion of these shares shall vest as of the date of such termination on a pro rata basis determined by the number of days that the participant served on the Board from the grant date through the date of such termination. The fair value of the restricted shares at the time of grant was $101.

On June 13, 2013, the Company issued 8,784 shares of non-vested (“restricted”) common stock to its non-employee directors under the 2012 Non-Employee Directors Compensation Plan. The shares will vest and become unforfeitable on the first anniversary of the grant date. Upon termination of service from the Board at any time, a portion of these shares shall vest as of the date of such termination on a pro rata basis determined by the number of days that the participant served on the Board from the grant date through the date of such termination. The fair value of the restricted shares at the time of grant was $225.

2012 Long-Term Incentive Plan — On January 11, 2012, the Company approved the 2012 Long-Term Incentive Plan (“2012 Plan”), which will be used to issue equity grants to employees. As of December 31, 2013, 7,042,568 shares of common stock remained available for issuance under the 2012 Plan. This includes (i) any shares that were available for issuance under the 2006 Plan (as defined below) as of its discontinuance date and that became available for issuance under the 2012 Plan and (ii) any shares that were subject to outstanding awards under the 2006 Plan and have expired or terminated or were cancelled between the discontinuance date of the 2006 Plan and December 31, 2013 and therefore became available for issuance under the 2012 Plan. In addition, up to 2,647,121 shares that are subject to outstanding awards as of December 31, 2013 under the 2006 Plan and that expire or terminate for any reason prior to exercise or that would otherwise have returned to the 2006 Plan’s share reserve under the terms of the 2006 Plan will be available for awards to be granted under the 2012 Plan.

During the year ended December 31, 2013, the Company issued a total of 1,987,952 shares underlying stock options under the 2012 Plan with an aggregate grant-date fair value of $19,473.

2006 Stock Option Plan — Effective May 31, 2006, the Board of Directors of the Company adopted the 2006 Stock Option Plan (the “2006 Plan”). The Company’s stock option plan permitted the granting of options to directors, employees, and certain independent contractors. The Compensation Committee of the Board of Directors generally had the authority to select individuals who were to receive options and to specify the terms and conditions of each option so granted, including the number of shares covered by the option, the exercise price, vesting provisions, and the overall option term. In January 2012, the 2006 Plan was discontinued; however, outstanding awards remain subject to the terms of the 2006 Plan and any shares that are subject to an option that was previously granted under the 2006 Plan and that will expire or terminate for any reason prior to exercise will become again available for issuance under the 2012 Plan. All of the options issued pursuant to the 2006 Plan expire ten years from the date of grant.

Stock option activity under the Company’s plans is set forth below:

	Number of Options			Weighted Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at January 1, 2011		6,378,584		$	3.79	$	19,708
Options granted		600,000			14.00		1,200
Options exercised		(47,600	)		1.52		(499	)
Options forfeited/cancelled		(335,848	)		5.30		(2,250	)
Options outstanding at December 31, 2011		6,595,136		$	4.65	$	48,447
Options granted		1,443,810			16.80		1,877
Options exercised		(1,552,742	)		3.53		(22,623	)
Options forfeited/cancelled		(189,495	)		11.35		(1,279	)
Options outstanding at December 31, 2012		6,296,709		$	7.51	$	66,682
Options granted		1,987,952			23.60<