Costco 2005 Annual Report Download - page 42

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Note 1—Summary of Significant Accounting Policies (Continued)
Short-term investments at August 28, 2005 and August 29, 2004, were as follows:
Fiscal 2005
Cost
Basis
Unrealized
Gains
Unrealized
Losses
Recorded
Basis
Certificates of deposit ................................ $ 43,719 $ — $ — $ 43,719
U.S. government and agency securities ................... 562,370 25 (4,629) 557,766
Money market mutual funds ........................... 49,372 — — 49,372
Corporate notes and bonds ............................ 696,267 66 (2,289) 694,044
Asset and mortgage backed securities .................... 52,782 21 (432) 52,371
Total short-term investments ....................... $1,404,510 $112 $(7,350) $1,397,272
Fiscal 2004
Cost
Basis
Unrealized
Gains
Unrealized
Losses
Recorded
Basis
Certificates of deposit ................................ $ 23,450 $ — $ — $ 23,450
U.S. government and agency securities ................... 46,060 102 (107) 46,055
Money market mutual funds ........................... 1,662 — — 1,662
Corporate notes and bonds ............................ 216,271 95 (149) 216,217
Asset and mortgage backed securities .................... 19,444 34 (115) 19,363
Total short-term investments ....................... $ 306,887 $231 $ (371) $ 306,747
Unrealized losses from fixed income securities are primarily attributable to changes in interest rates. Of the
unrealized losses of $7,350 and $371 at August 28, 2005 and August 29, 2004, respectively, $222 and $0 have
holding periods exceeding twelve months. Management does not believe any unrealized losses represent an
other-than-temporary impairment based on our evaluation of available evidence as of August 28, 2005. The
Company currently has the financial ability to hold short-term investments with an unrealized loss until maturity
and not incur any recognized losses.
The estimate of fair value is based on publicly available market information or other estimates determined
by management. The maturities of short-term investments at August 28, 2005, were as follows:
Cost Basis
Estimated
Fair Value
Due in one year or less .................................. $ 736,390 $ 735,075
Due after one year through five years ....................... 648,079 642,249
Due after five years ..................................... 20,041 19,948
Total ................................................ $1,404,510 $1,397,272
Short-term investments include fixed maturity securities.
Receivables, net
Receivables consist primarily of vendor rebates and promotional allowances, receivables from government
tax authorities and other miscellaneous amounts due to the Company, and are net of an allowance for doubtful
accounts of $1,416 at August 28, 2005 and $1,139 at August 29, 2004. Management determines the allowance for
doubtful accounts based on known troubled accounts and historical experience applied to an aging of accounts.
Vendor Rebates and Allowances
Periodic payments from vendors in the form of volume rebates or other purchase discounts that are evi-
denced by signed agreements are reflected in the carrying value of the inventory when earned or as the Company
41