Bed, Bath and Beyond 2014 Annual Report Download - page 23

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
A. Nature of Operations
Bed Bath & Beyond Inc. and subsidiaries (the ‘‘Company’’) is a retailer which operates under the names Bed Bath & Beyond
(‘‘BBB’’), Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! (collectively, ‘‘CTS’’), Harmon or Harmon Face
Values (collectively, ‘‘Harmon’’), buybuy BABY and World Market, Cost Plus World Market or Cost Plus (collectively, ‘‘Cost Plus
World Market’’). Customers can purchase products from the Company either in-store, online or through a mobile device. The
Company has the developing ability to have customer purchases picked up in-store or shipped direct to the customer from the
Company’s distribution facilities, stores or vendors. The Company also operates Linen Holdings, a provider of a variety of
textile products, amenities and other goods to institutional customers in the hospitality, cruise line, healthcare and other
industries. Additionally, the Company is a partner in a joint venture which operates five retail stores in Mexico under the name
Bed Bath & Beyond. The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics
merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings
include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables
and certain juvenile products. As the Company operates in the retail industry, its results of operations are affected by general
economic conditions and consumer spending habits.
The Company accounts for its operations as two operating segments: North American Retail and Institutional Sales. The
Institutional Sales operating segment, which is comprised of Linen Holdings, does not meet the quantitative thresholds under
U.S. generally accepted accounting principles and therefore is not a reportable segment.
B. Fiscal Year
The Company’s fiscal year is comprised of the 52 or 53 week period ending on the Saturday nearest February 28. Accordingly,
fiscal 2014 and fiscal 2013 represented 52 weeks and ended on February 28, 2015 and March 1, 2014, respectively. Fiscal 2012
represented 53 weeks and ended on March 2, 2013.
C. Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.
The Company accounts for its investment in the joint venture under the equity method.
Certain reclassifications have been made to the fiscal 2013 consolidated balance sheet and the fiscal 2013 and 2012
consolidated statements of cash flows to conform to the fiscal 2014 consolidated balance sheet and consolidated statement of
cash flows presentation.
All significant intercompany balances and transactions have been eliminated in consolidation.
D. Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires
the Company to establish accounting policies and to make estimates and judgments that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical
experience and on other assumptions that it believes to be relevant under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
In particular, judgment is used in areas such as inventory valuation, impairment of long-lived assets, impairment of auction
rate securities, goodwill and other indefinite lived intangible assets, accruals for self insurance, litigation, store opening,
expansion, relocation and closing costs, the provision for sales returns, vendor allowances, stock-based compensation and
income and certain other taxes. Actual results could differ from these estimates.
E. Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash
equivalents. Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle
within 5 business days, of $90.3 million and $87.4 million as of February 28, 2015 and March 1, 2014, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Bed Bath & Beyond Inc. and Subsidiaries
BED BATH & BEYOND 2014 ANNUAL REPORT
21