Ross 2010 Annual Report Download - page 39

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37
Property and equipment. Property and equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation is calculated using the straight-line method over the estimated useful life of the asset, typically ranging from
fi ve to 12 years for equipment and 20 to 40 years for real property. Depreciation and amortization expense on property and
equipment was $160.7 million, $159.0 million, and $141.8 million for fi scal 2010, 2009, and 2008, respectively. The cost of
leasehold improvements is amortized over the useful life of the asset or the applicable lease term, whichever is less. Computer
hardware and software costs, net of amortization, of $102.0 million and $106.7 million at January 29, 2011 and January 30, 2010,
respectively, are included in fi xtures and equipment and are amortized over their estimated useful life generally ranging from fi v e
to seven years. The Company capitalizes interest during the construction period. Interest capitalized was $0.1 million and
$1.8 million in fi scal 2010 and fi scal 2009, respectively.
Other long-term assets. Other long-term assets as of January 29, 2011 and January 30, 2010 consisted of the following:
($000) 2010 2009
Deferred compensation (Note B) $ 63,569 $ 50,706
Goodwill 2,889 2,889
Deposits 3,835 3,000
Other 4,814 6,744
Total $ 75,107 $ 63,339
Other assets are principally comprised of prepaid rent and other long-term prepayments.
Property, other long-term assets, and certain identifi able intangibles that are subject to amortization are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible
assets that are not subject to amortization, including goodwill, are tested for impairment annually or more frequently if events or
changes in circumstances indicate that the asset may be impaired. Based on the Company’s evaluation during fi scal 2010, fi scal
2009, and fi scal 2008, no impairment charges were recorded.
Store closures. The Company continually reviews the operating performance of individual stores. For stores that are closed, the
Company records a liability for future minimum lease payments net of estimated sublease recoveries and related ancillary costs
at the time the liability is incurred. In 2010, the Company closed six Ross stores. In 2009, the Company closed three Ross and
four dd’s DISCOUNTS locations. The lease loss liability related to certain of these closed stores was $4.9 million and $6.2 million,
as of January 29, 2011 and January 30, 2010, respectively. Operating costs, including depreciation, of stores to be closed are
expensed during the period they remain in use.
Accounts payable. Accounts payable represents amounts owed to third parties at the end of the period. Accounts payable
includes book cash overdrafts (checks issued under zero balance accounts not yet presented for payment) in excess of cash
balances in such accounts of approximately $53.4 million and $125.7 million at January 29, 2011 and January 30, 2010,
respectively. The Company includes the change in book cash overdrafts in operating cash fl ows.