Best Buy 2014 Annual Report Download - page 75

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70
Vendor Allowances
We receive allowances from certain vendors through a variety of programs and arrangements intended to offset our costs of
promoting and selling merchandise inventories. Vendor allowances are primarily in the form of receipt-based funds or sell-
through credits. Receipt-based funds are generally determined at an agreed percentage of purchases and are initially deferred
and recorded as a reduction of merchandise inventories. The deferred amounts are then included as a reduction of cost of goods
sold when the related product is sold. Sell-through credits are generally determined at an agreed percentage of sales and are
recognized when the related product is sold. Vendor allowances provided as a reimbursement of specific, incremental and
identifiable costs, such as specialized store labor or training costs, are included in SG&A as an expense reduction when the cost
is incurred.
Advertising Costs
Advertising costs, which are included in SG&A, are expensed the first time the advertisement runs. Advertising costs consist
primarily of print and television advertisements as well as promotional events. Advertising expenses were $775 million, $732
million and $828 million in fiscal 2014, 2013 (11-month) and 2012, respectively.
Stock-Based Compensation
We apply the fair value recognition provisions of accounting guidance as they relate to our stock-based compensation, which
require us to recognize expense for the fair value of our stock-based compensation awards. We recognize compensation
expense on a straight-line basis over the requisite service period of the award (or to an employee's eligible retirement date, if
earlier).
2. Fiscal Year-end Change
On November 2, 2011, our Board of Directors approved a change to our fiscal year-end from the Saturday nearest the end of
February to the Saturday nearest the end of January. As a result of this change, our fiscal year 2013 was an 11-month transition
period beginning March 4, 2012, through February 2, 2013. In the first quarter of fiscal 2013 (11-month), we also began
consolidating the results of our Europe, China and Mexico operations on a one-month lag, compared to a two-month lag in
fiscal year 2012, to continue to align our fiscal reporting periods with statutory filing requirements.
The following table shows the fiscal months included within our financial statements and footnotes for fiscal 2014, fiscal 2013
(11-month) and fiscal 2012.
New Fiscal Calendar(1) Previous Fiscal Calendar(1)
2014 2013 (11-Month) 2012
February 2013 - January 2014 March 2012 - January 2013 March 2011 - February 2012
(1) For entities reported on a lag, the fiscal months included in fiscal 2013 (11-month) were February through December, and in fiscal 2014 and 2012 were
January through December.
January Results for Entities Reported on a Lag
As a result of the 11-month transition period in fiscal 2013, the month of January 2012 was not captured in our consolidated
fiscal 2013 (11-month) results for those entities reported on a one-month lag. The following is selected financial data for the
one month ended January 31, 2012, and the comparable prior year period, for entities reported on a lag ($ in millions):