TJ Maxx 2009 Annual Report Download - page 72

and $364.2 million for fiscal 2008. Amortization expense for property held under a capital lease was $2.2 million in fiscal
2010, 2009 and 2008. Maintenance and repairs are charged to expense as incurred. Significant costs incurred for
internally developed software are capitalized and amortized over 3 to 10 years. Upon retirement or sale, the cost of
disposed assets and the related accumulated depreciation are eliminated and any gain or loss is included in income. Pre-
opening costs, including rent, are expensed as incurred.
Lease Accounting: TJX begins to record rent expense when it takes possession of a store, which is typically 30 to
60dayspriortotheopeningofthestoreandgenerallyoccursbefore the commencement of the lease term, as specified in
the lease.
Long-Lived Assets: Presented below is information related to carrying values of our long-lived assets by geographic
location:
Dollars in thousands
January 30,
2010
January 31,
2009
January 26,
2008
United States $1,607,733 $1,631,370 $1,533,914
TJX Canada 195,434 178,176 217,342
TJX Europe 483,930 391,658 483,879
Total long-lived assets $2,287,097 $2,201,204 $2,235,135
Goodwill and Tradename: Goodwill is primarily the excess of the purchase price paid over the carrying value of the
minority interest acquired in fiscal 1990 in TJX’s former 83%-owned subsidiary and represents goodwill associated with
the T.J. Maxx chain. In addition, goodwill includes the excess of cost over the estimated fair market value of the net assets
of Winners acquired by TJX in fiscal 1991.
Goodwill totaled $72.1 million as of January 30, 2010, $71.8 million as of January 31, 2009 and $72.2 million as of
January 26, 2008. Goodwill is considered to have an indefinite life and accordingly is not amortized. Changes in
goodwill are attributable to the effect of exchange rate changes on Winners’ reported goodwill.
Tradename is the value assigned to the name “Marshalls,” acquired by TJX in fiscal 1996 as part of the acquisition of
the Marshalls chain. The value of the tradename was determined by the discounted present value of assumed after-tax
royalty payments, offset by a reduction for their pro-rata share of negative goodwill acquired. The Marshalls tradename is
carried at a value of $107.7 million and is considered to have an indefinite life.
TJX occasionally acquires or licenses other trademarks to be used in connection with private label merchandise. Such
trademarks are included in other assets and are amortized to cost of sales, including buying and occupancy costs, over
their useful life, generally from 7 to 10 years.
Goodwill, tradename and trademarks, and the related amortization if any, are included in the respective operating
segment to which they relate. There is no accumulated impairment related to our goodwill, tradename or trademarks.
Impairment of Long-Lived Assets, Goodwill and Tradename: TJX evaluates its long-lived assets and assets with
indefinite lives (other than Goodwill and Tradename) for indicators of impairment whenever events or changes in
circumstances indicate their carrying amounts may not be recoverable, and at least annually in the fourth quarter of each
fiscal year. An impairment exists when the undiscounted cash flow of an asset or asset group is less than the carrying cost
of that asset or asset group. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows,
which is generally at the individual store level. If indicators of impairment are identified, an undiscounted cash flow
analysis is performed to determine if an impairment exists. The store-by-store evaluations did not indicate any
recoverability issues (for any of our continuing operations) during the past three fiscal years.
Goodwillistestedforimpairmentwhenevereventsorchanges in circumstances indicate that an impairment may
have occurred and at least annually in the fourth quarter of each fiscal year, by comparing the carrying value of the related
reporting unit to its fair value. An impairment exists when this analysis, using typical valuation models such as the
discounted cash flow method, shows that the fair value of the reporting unit is less than the carrying cost of the reporting
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