Best Buy 2013 Annual Report Download - page 66

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66
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Unless the context otherwise requires, the use of the terms "Best Buy", "we," "us" and "our" in these Notes to Consolidated
Financial Statements refers to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries.
Description of Business
We are a multi-national e-commerce and physical retailer of consumer electronics, including mobile phones, tablets and
computers, large and small appliances, televisions, digital imaging and entertainment products and related accessories. We have
two operating segments: Domestic and International. The Domestic segment is comprised of store, call center and online
operations in all states, districts and territories of the U.S., operating under the brand names Best Buy, Best Buy Mobile, Geek
Squad, Magnolia Audio Video and Pacific Sales. The International segment is comprised of: (i) all Canada store, call center and
online operations, operating under the brand names Best Buy, Best Buy Mobile, Cell Shop, Connect Pro, Future Shop and Geek
Squad, (ii) all Europe store, call center and online operations, operating under the brand names The Carphone Warehouse, The
Phone House and Geek Squad, (iii) all China store and call center operations, operating under the brand names Five Star and
Best Buy Mobile and (iv) all Mexico store operations operating under the brand names Best Buy, Best Buy Express and Geek
Squad.
In addition to our retail store operations, we also operate websites including BestBuy.com, BestBuy.ca, BestBuyMobile.com,
CarphoneWarehouse.com, FutureShop.ca and PhoneHouse.com.
Fiscal Year
On November 2, 2011, our Board of Directors approved a change in our fiscal year-end from the Saturday nearest the end of
February to the Saturday nearest the end of January, effective beginning with our fiscal year 2013. As a result of this change,
our fiscal year 2013 is an 11-month transition period beginning March 4, 2012 through February 2, 2013. Concurrent with the
change, we began consolidating the results of our Europe, China and Mexico operations on a one-month lag, compared to a
two-month lag in prior years, to continue aligning the fiscal reporting periods of our international operations with statutory
filing requirements. In these consolidated statements, including the notes thereto, financial results for fiscal 2013 are for an 11-
month period. Corresponding results for fiscal 2012 and fiscal 2011 are both for 12-month periods. In addition, our
Consolidated Statements of Earnings and Consolidated Statements of Cash Flows also include an unaudited 11-month fiscal
2012 (recast). Fiscal 2013 (11-month) included 48 weeks, fiscal 2012 included 53 weeks, and fiscal 2011 included 52 weeks.
Basis of Presentation
The consolidated financial statements include the accounts of Best Buy Co., Inc. and its consolidated subsidiaries. Investments
in unconsolidated entities over which we exercise significant influence but do not have control are accounted for using the
equity method. All intercompany balances and transactions are eliminated upon consolidation.
In order to align our fiscal reporting periods and comply with statutory filing requirements, we consolidate the financial results
of our Europe, China and Mexico operations on a lag. Due to our fiscal year-end change, this was a one-month lag in fiscal
2013 (11-month) and a two-month lag in fiscal 2012 and 2011. Our policy is to accelerate recording the effect of events
occurring in the lag period that significantly affect our consolidated financial statements. In fiscal 2012, we recorded $82
million of restructuring charges recorded in January 2012 related to our large-format Best Buy branded store closures in the
United Kingdom ("U.K") as well as a $1.2 billion goodwill impairment charge attributable to our Best Buy Europe reporting
unit. Except for these restructuring activities and the goodwill impairment in fiscal 2012, no significant intervening event
occurred in these operations that would have materially affected our financial condition, results of operations, liquidity or other
factors had it been recorded during fiscal 2013 (11-month). For further information about our restructuring and the nature of the
charges we recorded, refer to Note 7, Restructuring Charges. For further information about the goodwill impairment, refer to
Goodwill and Intangible Assets below, as well as Note 3, Profit Share Buy-Out.
In preparing the accompanying consolidated financial statements, we evaluated the period from February 3, 2013 through the
date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events
were identified for this period.
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