DSW 2014 Annual Report Download - page 32

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Table of Contents
(2) As of January 31, 2015, we have entered into various construction commitments, including capital items to be purchased for projects that were under
construction, or for which a lease has been signed. Our obligations under these commitments aggregated to approximately $6.9 million as of January 31,
2015.
(3) We are able to cancel many of our purchase obligations without payment or penalty, and therefore we have excluded such obligations.
We had no outstanding letters of credit as of January 31, 2015 that were not collateralized by cash deposits.

Recent Accounting Pronouncements and their impact on DSW are disclosed in Note 4 to the Consolidated Financial Statements included in this Annual
Report on Form 10-K.

As discussed in Note 4 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K, the preparation of our consolidated
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of commitments and contingencies at the date of the consolidated financial statements and reported amounts of revenues and
expenses during the reporting period. We base these estimates and judgments on our historical experience and other factors we believe to be relevant, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The
process of determining significant estimates is fact-specific and takes into account factors such as historical experience, current and expected economic
conditions, product mix, and in some cases, actuarial and appraisal techniques. We constantly re-evaluate these significant factors and make adjustments
where facts and circumstances dictate.
While we believe that our historical experience and other factors considered provide a meaningful basis for the accounting policies applied in the preparation
of the consolidated financial statements, we cannot guarantee that our estimates and assumptions will be accurate. As the determination of these estimates
requires the exercise of judgment, actual results inevitably will differ from those estimates, and such differences may be material to our consolidated financial
statements. We believe the following represent the most significant accounting policies, critical estimates and assumptions, among others, used in the
preparation of our consolidated financial statements:
Policy Judgments and Estimates Effect if Actual Results Differ from Assumptions
Revenue Recognition. Revenues from merchandise
sales are recognized upon customer receipt of
merchandise, are net of returns through period end,
exclude sales tax and are not recognized until
collectibility is reasonably assured.
For online and ship from store sales, we estimate a
time lag for shipments to record revenue when the
customer receives the goods.
For ship from store, we believe a one day change
in our estimate would not materially impact our
revenue.
As our merchandise sales are recognized net of
returns, we use judgments and estimates for the
amount of future returns we expect to receive
through our sales return allowance.
If our sales return rate were to increase or
decrease by 1%, it would result in an increase or
a decrease of approximately $0.4 million to the
reserve at year end.
28
Source: DSW Inc., 10-K, March 26, 2015 Powered by Morningstar® Document Research℠
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