Dillard's 2009 Annual Report Download - page 57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Description of Business and Summary of Significant Accounting Policies (Continued)
are analyzed to determine whether it is ‘‘more likely than not’’ that a tax position will be sustained
upon examination by the appropriate taxing authorities before any part of the benefit can be recorded
in the financial statements. For those tax positions where it is not ‘‘more likely than not’’ that a tax
benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and
penalties are also recorded.
Shipping and Handling—The Company records shipping and handling reimbursements in service
charges and other income. The Company records shipping and handling costs in cost of sales.
Retirement Benefit Plans—The Company’s retirement benefit plan costs are accounted for using
actuarial valuations. The Company recognizes the funded status of its defined pension plans on the
balance sheet and recognizes changes in the funded status that arise during the period but that are not
recognized as components of net periodic benefit cost, within other comprehensive income, net of
income taxes.
Equity in (Losses) Earnings of Joint Ventures—Equity in (losses) earnings of joint ventures
includes the Company’s portion of the income or loss of the Company’s unconsolidated joint ventures.
Comprehensive Income (Loss)—Comprehensive income (loss) is defined as the change in equity
(net assets) of a business enterprise during a period from transactions and other events and
circumstances from non-owner sources. It consists of the net income or loss and other gains and losses
affecting stockholders’ equity that, under GAAP, are excluded from net income or loss. One such
exclusion is the amortization of retirement plan and other retiree benefit adjustments, which is the only
item impacting our accumulated other comprehensive loss.
Supply Concentration—The Company purchases merchandise from many sources and does not
believe that the Company was dependent on any one supplier during fiscal 2009.
Reclassifications—Certain items have been reclassified from their prior year classifications to
conform to the current year presentation.
New Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board (‘‘FASB’’) released the FASB Accounting
Standards Codification↩ and the Hierarchy of Generally Accepted Accounting Principles (‘‘the
Codification’’), effective for financial statements issued for interim and annual periods ending after
September 15, 2009. The Codification does not change GAAP, but does significantly change the way in
which the accounting literature is organized, combining all authoritative standards in a comprehensive,
topically organized database. All existing accounting standards documents were superseded and all
other accounting literature not included in the Codification is considered nonauthoritative, other than
guidance issued by the SEC. The Company adopted the provisions of this guidance during the quarter
ended October 31, 2009, which had no impact on the Company’s consolidated financial statements.
Derivative Instruments and Hedging Activities
In March 2008, the FASB issued new accounting guidance related to disclosures about derivative
instruments and hedging activities. This guidance amends and expands disclosure requirements to
provide a better understanding related to how and why an entity uses derivative instruments, how
derivative instruments and related hedged items are accounted for and their effect on an entity’s
F-12