GameStop 2011 Annual Report Download - page 89

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GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which amends the current fair value
measurement and disclosure guidance to include increased transparency around valuation inputs and investment
categorization. This guidance will be effective beginning in fiscal 2012. The adoption of ASU 2011-04 is not
expected to have a material impact on the Company’s consolidated net earnings, cash flows or financial position.
In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of
Comprehensive Income, which revises the current practice of including other comprehensive income within the
equity section of the statement of financial position and requires disclosure of other comprehensive income either
in a single continuous statement of comprehensive income or in a separate statement. This guidance will be
effective beginning in fiscal 2012. The adoption of ASU 2011-05 is not expected to have an impact on the
Company’s consolidated net earnings, cash flows or financial position, but the adoption will change the current
presentation of other comprehensive income in the Company’s consolidated financial statements.
In September 2011, the FASB issued ASU 2011-08, Intangibles — Goodwill and Other (Topic 350):
Testing Goodwill for Impairment. ASU 2011-08 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 2011-08 is effective for fiscal years, and interim periods within
those years, beginning after December 15, 2011. The adoption of ASU 2011-08 is not expected to have a material
effect on the Company’s consolidated financial statements.
2. Asset Impairments and Restructuring Charges
In the fourth quarter of fiscal 2011, the Company recorded asset impairments and restructuring charges of
$81.2 million, of which $37.8 million was recorded as a result of the Company’s annual impairment test of its
Micromania trade name. In addition, $22.7 million was recorded related to the impairment of investments in
non-core businesses, primarily a small retail movie chain of stores owned by the Company until fiscal 2011. The
Company also incurred restructuring charges in the fourth quarter of fiscal 2011 related to the exit of certain
markets in Europe and the closure of underperforming stores in the international segments, as well as the
consolidation of European home office sites and back-office functions. These restructuring charges are a result of
management’s plan to rationalize the international store base and improve profitability. In addition, the Company
recognized impairment charges related to its annual evaluation of store property, equipment and other assets in
situations where the asset’s carrying value was not expected to be recovered by its future cash flows over its
remaining useful life.
A summary of the Company’s asset impairments and restructuring charges for the 52 weeks ended
January 28, 2012 is as follows:
United States Canada Australia Europe Total
(In millions)
Intangible asset impairment ............................ $ — $— $— $37.8 $37.8
Impairment of investments in non-core businesses .......... 22.7 — — — 22.7
Property, equipment and other asset impairments ........... 3.2 1.1 0.5 6.4 11.2
Termination benefits .................................. 3.0 0.2 — 2.4 5.6
Facility closure and other costs ......................... — — 0.1 3.8 3.9
Total .............................................. $28.9 $1.3 $0.6 $50.4 $81.2
F-15