Costco 2004 Annual Report Download - page 28

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Costco Wholesale Corporation:
We have audited the accompanying consolidated balance sheets of Costco Wholesale Corporation and sub-
sidiaries as of August 29, 2004 and August 31, 2003 and the related consolidated statements of income, stock-
holders’ equity and comprehensive income and cash flows for the 52 weeks ended August 29, 2004, August 31,
2003, and September 1, 2002. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free of material misstatement. An audit includes examin-
ing, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Costco Wholesale Corporation and subsidiaries as of August 29, 2004 and
August 31, 2003, and the results of their operations and their cash flows for the 52 weeks ended August 29, 2004,
August 31, 2003, and September 1, 2002 in conformity with U.S. generally accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, effective February 16, 2004, the Company
adopted Emerging Issues Task Force Issue No. 03-10, “Application of Issue No. 02-16 by Resellers to Sales In-
centives Offered to Consumers by Manufacturers,” and effective September 2, 2002, the Company adopted the
fair value method of recording stock-based compensation expense in accordance with Statement of Financial
Accounting Standards No. 123, “Accounting for Stock-Based Compensation.” Additionally, as discussed in Note
1 to the consolidated financial statements, during the fiscal year ended August 31, 2003, the Company adopted
Emerging Issues Task Force Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain
Consideration Received from a Vendor,” based on the specific transition guidance.
Seattle, Washington
October 22, 2004
26