GameStop 2009 Annual Report Download - page 76

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GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Background
GameStop Corp. (together with its predecessor companies, “GameStop,” “we,” “our,” or the “Company”) is
the world’s largest retailer of video game systems and software and PC entertainment software and related
accessories primarily through its GameStop and EB Games stores. We also operate electronic commerce Web sites
www.gamestop.com, www.ebgames.com.au, www.gamestop.ca, www.gamestop.it, and www.micromania.fr, and
publish Game Informer Magazine. The Company’s stores, which totaled 6,450 at January 30, 2010, are located in
major regional shopping malls and strip centers. The Company operates in four business segments, which are the
United States, Australia, Canada and Europe.
The Company is a Delaware corporation, formerly known as GSC Holdings Corp., and has grown through a
business combination (the “EB merger”) of GameStop Holdings Corp., formerly known as GameStop Corp., and
Electronics Boutique Holdings Corp. (“EB”), which was completed on October 8, 2005. The Company also has
grown through acquisitions, including the purchase in November 2008 of SFMI Micromania SAS (“Micromania”),
a leading retailer of video and computer games in France.
Basis of Presentation and Consolidation
Our consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and
its majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in
consolidation. All dollar and share amounts in the consolidated financial statements and notes to the consolidated
financial statements are stated in thousands unless otherwise indicated.
The Company’s fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of
January. Fiscal 2009 consisted of the 52 weeks ended on January 30, 2010. Fiscal 2008 consisted of the 52 weeks
ended on January 31, 2009. Fiscal 2007 consisted of the 52 weeks ended on February 2, 2008. The Company’s
operating results for fiscal 2009 include 52 weeks of Micromania’s results and the operating results for fiscal 2008
include 11 weeks of Micromania’s results.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America (“GAAP”) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. In preparing
these financial statements, management has made its best estimates and judgments of certain amounts included in
the financial statements, giving due consideration to materiality. Changes in the estimates and assumptions used by
management could have significant impact on the Company’s financial results. Actual results could differ from
those estimates.
Reclassifications
Certain reclassifications have been made to conform the prior period data to the current year presentation.
Cash and Cash Equivalents
The Company considers all short-term, highly-liquid instruments purchased with an original maturity of three
months or less to be cash equivalents. The Company’s cash and cash equivalents are carried at cost, which
approximates market value, and consist primarily of time deposits with highly rated commercial banks. From time
to time depending upon interest rates, credit worthiness and other factors, the Company invests in money market
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