Banana Republic 2010 Annual Report Download - page 47

Notes to Consolidated Financial Statements
For the Fiscal Years Ended January 29, 2011, January 30, 2010, and January 31, 2009
Note 1. Organization and Summary of Significant Accounting Policies
Organization
The Gap, Inc., a Delaware Corporation, is a global specialty retailer offering apparel, accessories, and personal care
products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, and Athleta
brands. We have Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, and
Japan, and beginning in November 2010, China and Italy. We also have franchise agreements with unaffiliated
franchisees to operate stores in Asia, Australia, Europe, Latin America, and the Middle East under the Gap and
Banana Republic brand names. Customers in the U.S. can shop online at gap.com, oldnavy.com,
bananarepublic.com, piperlime.com, and athleta.com. Beginning in fiscal 2010, customers in Canada can shop
online at gapcanada.ca, oldnavy.ca, and bananarepublic.ca, customers in the United Kingdom and select European
countries can shop online at gap.eu and bananarepublic.eu, customers in China can shop online at gap.cn, and
customers in select international countries can shop online at gap.com, oldnavy.com, bananarepublic.com,
piperlime.com, and athleta.com.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of The Gap, Inc. and its subsidiaries (the “Company,”
“we,” and “our”). All intercompany transactions and balances have been eliminated.
Fiscal Year and Presentation
Our fiscal year is a 52- or 53-week period ending on the Saturday closest to January 31. Fiscal years ended January 29,
2011 (fiscal 2010), January 30, 2010 (fiscal 2009), and January 31, 2009 (fiscal 2008) consisted of 52 weeks.
Issuance of common stock and reissuance of treasury stock pursuant to stock option and other stock award plans,
net of shares withheld for employee taxes have been combined for fiscal 2009 and 2008 in the Consolidated
Statements of Stockholders’ Equity to conform to fiscal 2010 presentation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
Cash and Cash Equivalents and Short-Term Investments
Amounts in transit from banks for customer credit card and debit card transactions that process in less than seven
days are classified as cash. The banks process the majority of these amounts within one to two business days.
All highly liquid investments with maturities of 91 days or less at the date of purchase are classified as cash
equivalents. Highly liquid investments with maturities of greater than 91 days and less than one year from the
balance sheet date are classified as short-term investments. Our cash equivalents and short-term investments are
placed primarily in money market funds, domestic commercial paper, U.S. treasury bills, and bank deposits, and are
classified as held-to-maturity based on our positive intent and ability to hold the securities to maturity. These
investments are stated at amortized cost, which approximates market value due to their short maturities. Income
related to these securities is recorded in interest income in the Consolidated Statements of Income.
Restricted Cash
Restricted cash consists primarily of cash that serves as collateral for our insurance obligations. Any cash that is
legally restricted from use is classified as restricted cash. If the purpose of restricted cash relates to acquiring a
40 Gap Inc. Form 10-K