Banana Republic 2011 Annual Report Download - page 56

Notes to Consolidated Financial Statements
For the Fiscal Years Ended January 28, 2012, January 29, 2011, and January 30, 2010
Note 1. Organization and Summary of Significant Accounting Policies
Organization
The Gap, Inc., a Delaware Corporation, is a global specialty retailer offering apparel, accessories, and personal care
products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, and Athleta
brands. We have Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, and
Japan, and beginning in November 2010, China and Italy. We also have franchise agreements with unaffiliated
franchisees to operate Gap and Banana Republic stores in Asia, Australia, Eastern Europe, Latin America, the Middle
East, and Africa. In addition, our products are available to customers online in over 90 countries.
We identify our operating segments based on the way we manage and evaluate our business activities. We have
two reportable segments: Stores and Direct.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of The Gap, Inc. and its subsidiaries (the “Company,”
“we,” and “our”). All intercompany transactions and balances have been eliminated.
Fiscal Year and Presentation
Our fiscal year is a 52- or 53-week period ending on the Saturday closest to January 31. Fiscal years ended January 28,
2012 (fiscal 2011), January 29, 2011 (fiscal 2010), and January 30, 2010 (fiscal 2009) consisted of 52 weeks. The fiscal
year ending February 2, 2013 (fiscal 2012) will consist of 53 weeks.
Issuance of common stock and reissuance of treasury stock pursuant to stock option and other stock award plans,
net of shares withheld for employee taxes, have been combined for fiscal 2009 in the Consolidated Statements of
Stockholders’ Equity to conform to fiscal 2011 and 2010 presentation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
Cash and Cash Equivalents and Short-Term Investments
Amounts in transit from banks for customer credit card and debit card transactions that process in less than seven
days are classified as cash. The banks process the majority of these amounts within one to two business days.
All highly liquid investments with original maturities of 91 days or less are classified as cash equivalents. Highly
liquid investments with original maturities of greater than 91 days that will mature less than one year from the
balance sheet date are classified as short-term investments. Our cash equivalents and short-term investments are
placed primarily in money market funds, time deposits, and commercial paper and are classified as
held-to-maturity based on our positive intent and ability to hold the securities to maturity. We value these
investments at their original purchase prices plus interest that has accrued at the stated rate. Income related to
these securities is recorded in interest income in the Consolidated Statements of Income.
Restricted Cash
Restricted cash consists primarily of cash that serves as collateral for our insurance obligations. Any cash that is
legally restricted from use is classified as restricted cash. If the purpose of restricted cash relates to acquiring a
42 Gap Inc. Form 10-K