Ross 2010 Annual Report Download - page 40

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38
Self-insurance. The Company is self-insured for workers’ compensation, general liability insurance costs, and costs of certain
medical plans. The self-insurance liability is determined actuarially, based on claims fi led and an estimate of claims incurred but
not yet reported. Self-insurance reserves as of January 29, 2011 and January 30, 2010 consisted of the following:
($000) 2010 2009
Workers’ compensation $ 67,425 $ 61,525
General liability 25,490 19,196
Medical plans 3,344 3,107
Total $ 96,259 $ 83,828
Workers’ compensation and self-insured medical plan liabilities are included in accrued payroll and benefi ts, and accruals for
general liability are included in accrued expenses and other in the accompanying consolidated balance sheets.
Other long-term liabilities. Other long-term liabilities as of January 29, 2011 and January 30, 2010 consisted of the following:
($000) 2010 2009
Deferred rent $ 58,989 $ 58,954
Deferred compensation 63,569 50,706
Tenant improvement allowances 22,392 26,559
Income taxes (See Note F) 41,784 33,570
Other 3,255 4,754
Total $ 189,989 $ 174,543
Lease accounting. When a lease contains “rent holidays” or requires fi xed escalations of the minimum lease payments, the
Company records rental expense on a straight-line basis over the term of the lease and the difference between the average
rental amount charged to expense and the amount payable under the lease is recorded as deferred rent. The Company begins
recording rent expense on the lease possession date. Tenant improvement allowances are included in other long-term liabilities
and are amortized over the lease term. Changes in tenant improvement allowances are included as a component of operating
activities in the consolidated statements of cash fl ows.
Estimated fair value of fi nancial instruments. The carrying value of cash and cash equivalents, short- and long-term
investments, accounts receivable, other long-term assets, accounts payable, and other long-term liabilities approximates their
estimated fair value. See Note B and Note D for additional fair value information.
Revenue recognition. The Company recognizes revenue at the point of sale and maintains an allowance for estimated future
returns. Sales of gift cards are deferred until they are redeemed for the purchase of Company merchandise. Sales tax collected is
not recognized as revenue and is included in accrued expenses and other.