Abercrombie & Fitch 2009 Annual Report Download - page 56

store supplies held at a third party replenishment center, were $11.1 million and $19.7 million at January 30,
2010 and January 31, 2009, respectively, and were classified as Other Current Assets on the Consolidated
Balance Sheets. Non-current store supplies were $32.4 million and $35.7 million at January 30, 2010 and
January 31, 2009, respectively, and were classified as Other Assets on the Consolidated Balance Sheets.
PROPERTY AND EQUIPMENT
Depreciation and amortization of property and equipment are computed for financial reporting purposes
on a straight-line basis, using service lives ranging principally from 30 years for buildings; the lesser of the
useful life of the asset, which ranges from three to 15 years, or the term of the lease for leasehold
improvements; the lesser of the useful life of the asset, which ranges from three to seven years, or the
term of the lease when applicable for information technology; and from three to 20 years for other property
and equipment. The cost of assets sold or retired and the related accumulated depreciation or amortization are
removed from the accounts with any resulting gain or loss included in net income. Maintenance and repairs
are charged to expense as incurred. Major remodels and improvements that extend service lives of the assets
are capitalized.
Long-lived assets, primarily comprised of property and equipment, are reviewed periodically for
impairment or whenever events or changes in circumstances indicate that full recoverability of net asset
balances through future cash flows is in question. Factors used in the evaluation include, but are not limited to,
management’s plans for future operations, recent operating results and projected cash flows. During Fiscal
2009, as a result of a strategic review of the RUEHL business, the Company determined that a triggering event
occurred. As a result of that assessment, the Company incurred non-cash pre-tax impairment charges of
$51.5 million, reported in Net Loss from Discontinued Operations on the Consolidated Statement of
Operations and Comprehensive Income for the fifty-two weeks ended January 30, 2010. There was no
remaining fair value of RUEHL long-lived assets as of January 30, 2010.
In the fourth quarter of Fiscal 2009, as part of the Company’s year-end review of assets, the Company
incurred a non-cash pre-tax impairment charge of $33.2 million, reported in Stores and Distribution Expense on
the Consolidated Statement of Operations and Comprehensive Income for the fifty-two weeks ended January 30,
2010. The charge was associated with 34 Abercrombie & Fitch stores, 46 abercrombie kids stores and 19 Hollister
stores. In Fiscal 2008, the Company incurred a non-cash pre-tax impairment charge of approximately $8.3 million
related to long-lived assets. The charge was associated with 11 Abercrombie & Fitch stores, six abercrombie kids
stores and three Hollister stores and was reported in Stores and Distribution Expense on the Consolidated
Statement of Operations and Comprehensive Income for the fifty-two weeks ended January 31, 2009.
The Company also incurred a non-cash pre-tax impairment charge of approximately $22.3 million
related to long-lived assets associated with nine RUEHL stores which is reported in Net Loss from
Discontinued Operations on the Consolidated Statement of Operations and Comprehensive Loss for the
fifty-two weeks ended January 31, 2009.
The Company expenses all internal-use software costs incurred in the preliminary project stage and
capitalizes certain direct costs associated with the development and purchase of internal-use software within
property and equipment. Capitalized costs are amortized on a straight-line basis over the estimated useful
lives of the software, generally not exceeding seven years.
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ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)