GameStop 2010 Annual Report Download - page 61

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Table of Contents
In 2003, the Company purchased a 51% controlling interest in GameStop Group Limited, which operates stores in Ireland and the United
Kingdom. Under the terms of the purchase agreement, the minority interest owners have the ability to require the Company to purchase their
remaining shares in incremental percentages at a price to be determined based partially on the Company's price to earnings ratio and GameStop
Group Limited's earnings. Shares representing 16% were purchased in June 2008 and an additional 16% was purchased in July 2009, bringing the
Company's total interest in GameStop Group Limited to approximately 84%. The Company already consolidates the results of GameStop Group
Limited; therefore, any additional amounts acquired will not have a material effect on the Company's financial statements.
Off-Balance Sheet Arrangements
As of January 29, 2011, the Company had no off-balance sheet arrangements as defined in Item 303 of Regulation S-K.
Impact of Inflation
We do not believe that inflation has had a material effect on our net sales or results of operations.
Certain Relationships and Related Transactions
The Company has various relationships with Barnes & Noble, Inc. ("Barnes & Noble"), a related party through a common stockholder who is
the Chairman of the Board of Directors of Barnes & Noble and a member of the Company's Board of Directors. The Company operates departments
within eight bookstores operated by Barnes & Noble, whereby the Company pays a license fee to Barnes & Noble on the gross sales of such
departments. Additionally, www.gamestop.com is the exclusive specialty video game retailer listed on www.bn.com, Barnes & Noble's e-commerce
site whereby the Company pays a fee to Barnes & Noble for sales of video game or PC entertainment products sold through www.bn.com. The
Company also continues to incur costs related to its participation in Barnes & Noble's workers' compensation, property and general liability
insurance programs prior to June 2005. During the 52 weeks ended January 29, 2011, January 30, 2010 and January 31, 2009, the charges related to
these transactions amounted to $1.4 million, $1.6 million and $1.9 million, respectively.
Recent Accounting Standards and Pronouncements
In January 2010, the FASB issued Accounting Standards Update ("ASU") ASU 2010-6, Improving Disclosures About Fair Value
Measurements. On January 31, 2010, the Company adopted ASU 2010-6, which requires reporting entities to make new disclosures about recurring
or nonrecurring fair-value measurements, including significant transfers into and out of the standard's Level 1 and Level 2 fair-value measurements
and information on purchases, sales, issuances, and settlements on a gross basis for Level 3 fair-value measurements. ASU 2010-6 is effective for
annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods
beginning after December 15, 2010. The adoption of ASU 2010-6 did not have a material impact on the Company's consolidated financial
statements.
On January 31, 2010, the Company adopted ASU 2010-09, Subsequent Events — Amendments to Certain Recognition and Disclosure
Requirements, which amends Accounting Standards Codification ("ASC") Topic 855, Subsequent Events, so that SEC filers no longer are required
to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The adoption of ASU
2010-09 did not have a material impact on the Company's consolidated financial statements.
In December 2010, the FASB issued ASU 2010-28, Intangibles — Goodwill and Other. ASU 2010-28 modifies step one of the goodwill
impairment test for reporting units with zero or negative carrying amounts and offers guidance on when to perform step two of the testing. For those
reporting units, an entity is required to perform step two of the goodwill impairment test if it is more likely than not that a goodwill impairment
exists based upon factors such as unanticipated competition, the loss of key personnel and adverse regulatory changes. ASU 2010-28 is effective for
fiscal years, and interim periods within those years, beginning after December 15, 2010. The adoption of ASU 2010-28 is not expected to have a
material effect on the Company's consolidated financial statements. 45