Nordstrom 2001 Annual Report Download - page 17

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20200324 NORDSTROM
2001 Annual Report • VERSION
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NORDSTROM INC. AND SUBSIDIARIES 1 5
Management’s Discussion and Analysis
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2001, the Company adopted SFAS No. 133,
“ Accounting for Derivative Instruments and Hedging Activities,”
as amended by SFAS No. 137 and No. 138. It requires the fair
value of all derivatives to be recognized as assets or liabilities,
and specifies accounting for changes in their fair value. Adoption
of this standard did not have a material impact on the Company’s
financial statements.
In March 2001, the Company adopted SFAS No. 140 “ Accounting
for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities,” a replacement of SFAS No. 125 with the same title.
It revises the standards for securitizations and other transfers of
financial assets and collateral and requires certain additional
disclosures, but otherwise retains most of SFAS No. 125’s
provisions. Adoption of this standard did not have a material
impact on the Company’s financial statements.
The Emerging Issues Task Force reached a consensus on Issue
No. 99-20, “ Recognition of Interest Income and Impairment
on Purchased and Retained Beneficial Interests in Securitized
Financial Assets,” which provides guidance on how a transferor
that retains an interest in securitized financial assets, or an
enterprise that purchases a beneficial interest in securitized
financial assets, should account for related interest income
and impairment. Adoption of this accounting issue for the
quarter ended July 31, 2001, did not have a material impact
on the Company’s financial statements.
In February 2002, the Company adopted SFAS No. 141 “ Business
Combinations” and No. 142 “ Goodwill and Other Intangible Assets.”
SFAS No. 141 requires that the purchase method of accounting
be used for all business combinations initiated after June 30, 2001,
and establishes specific criteria for the recognition of goodwill
separate from other intangible assets. Adoption of the accounting
provisions of SFAS No. 141 did not have a material impact on the
Company’s financial statements. Under SFAS No. 142, goodwill
and intangible assets having indefinite lives will no longer be
amortized but will be subject to annual impairment tests.
Other intangible assets will continue to be amortized over their
estimated useful lives. The Company is currently evaluating the
impact of SFAS No. 142 on its earnings and financial position.
In February 2002, the Company adopted SFAS No. 144,
“ Accounting for the Impairment or Disposal of Long-Lived Assets.”
SFAS No. 144 retains the fundamental provisions of SFAS No. 121,
but establishes new criteria for asset classification and broadens
the scope of qualifying discontinued operations. The adoption of
this statement did not have a material impact on the Company’s
financial statements.
FORWARD-LOOKING INFORMATION CAUTIONARY STATEMENT
Certain statements made in this annual report include forward-
looking statements regarding the Company’s performance, liquidity
and adequacy of capital resources. These statements are based
on the Company’s current assumptions and expectations and are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those projected. Forward-looking
statements are qualified by the risks and challenges posed by
increased competition, shifting consumer demand, changing
consumer credit markets, changing capital markets and general
economic conditions, hiring and retaining effective team members,
sourcing merchandise from domestic and international vendors,
investing in new business strategies, achieving growth objectives,
and other risks and uncertainties, including the uncertain economic
and political environment arising from the terrorist acts of
September 11th and subsequent terrorist activities. As a result,
while the Company believes there is a reasonable basis for the
forward-looking statements, one should not place undue reliance
on those statements.