Sprouts Farmers Market 2013 Annual Report Download - page 98

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Table of Contents
credit and debit card transactions are also classified as cash and cash equivalents. The amounts due from banks for these
transactions at each reporting date were as follows:
Accounts Receivable
Accounts receivable generally represent billings to vendors for earned rebates and allowances and other items. When a
specific account is determined uncollectible, the net recognized receivable is written off.
Inventories
Inventories consist of merchandise purchased for resale, which are stated at the lower of cost or market. The cost method is
used for warehouse perishable and store perishable department inventories by assigning costs to each of these items based on a
first-in, first-out (FIFO) basis (net of vendor discounts).
The Company’s valuation of its non-perishable inventory using weighted average costs includes statistical and other
estimation methods which the Company believes provide a reasonable basis to estimate its inventory values at the end of the
respective periods.
The Company believes that all inventories are saleable and no allowances or reserves for shrinkage or obsolescence were
recorded as of December 29, 2013 and December 30, 2012.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Expenditures for major
additions and improvements to facilities are capitalized, while maintenance and repairs are charged to expense as incurred. When
property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any
resulting gain or loss is reflected in the consolidated statements of operations. Depreciation expense, which includes the
amortization of assets recorded under capital and financing leases, is computed using the straight-line method over the estimated
useful lives of the individual assets. Leasehold improvements and assets under capital and financing leases are amortized over the
shorter of the lease term to which they relate, or the estimated useful life of the asset. Terms of leases used in the determination of
estimated useful lives may include renewal options if the exercise of the renewal option is determined to be reasonably assured.
The following table includes the estimated useful lives of asset classes:
93
As Of
December 29,
2013
December 30,
2012
Due from banks for debit and credit card transactions
$
20,463
$
18,092
Software and used equipment
3 years
Computer hardware
5 years
Furniture, fixtures and equipment
7 years
Leasehold improvements
up to 15 years
Buildings
40 years