Ross 2015 Annual Report Download - page 48

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46
Notes to Consolidated Financial Statements
Note A: Summary of Significant Accounting Policies
Business. Ross Stores, Inc. and its subsidiaries (the “Company”) is an off-price retailer of first-quality, in-season, name
brand and designer apparel, accessories, footwear, and home fashions for the entire family. At the end of fiscal 2015, the
Company operated 1,274 Ross Dress for Less® (“Ross”) locations in 34 states, the District of Columbia and Guam, and 172
dd’s DISCOUNTS® stores in 15 states. The Ross and dd's DISCOUNTS stores are supported by six distribution centers. The
Company’s headquarters, one buying office, three operating distribution centers, two warehouses, and 24% of its stores are
located in California.
Segment reporting. The Company has one reportable segment. The Company’s operations include only activities related to
off-price retailing in stores throughout the United States.
Basis of presentation and fiscal year. The consolidated financial statements include the accounts of the Company and its
subsidiaries, all of which are wholly-owned. Intercompany transactions and accounts have been eliminated. The Company
follows the National Retail Federation fiscal calendar and utilizes a 52-53 week fiscal year whereby the fiscal year ends on
the Saturday nearest to January 31. The fiscal years ended January 30, 2016, January 31, 2015 and February 1, 2014 are
referred to as fiscal 2015, fiscal 2014, and fiscal 2013, respectively, and were 52-week years.
Stock dividend. In March 2015, the Company’s Board of Directors declared a two-for-one stock split of the Company’s
common stock issued in the form of a stock dividend. Stockholders of record as of April 22, 2015 were issued one additional
share of common stock on June 11, 2015 for each share held. All share and per share amounts have been adjusted to
reflect the stock split.
Use of accounting estimates. The preparation of consolidated financial statements in conformity with Generally Accepted
Accounting Principles in the United States of America (“GAAP”) requires the Company to make estimates and assumptions
that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates. The Company’s significant accounting estimates include valuation reserves for
inventory shortage, packaway inventory costs, useful lives of fixed assets, insurance reserves, and reserves for uncertain tax
positions.
Purchase obligations. As of January 30, 2016, the Company had purchase obligations of approximately $1,721 million.
These purchase obligations primarily consist of merchandise inventory purchase orders, commitments related to
construction projects, store fixtures and supplies, and information technology service, transportation, and maintenance
contracts.
Cash and cash equivalents. Cash equivalents consist of highly liquid, fixed income instruments purchased with an original
maturity of three months or less.