Banana Republic 2012 Annual Report Download - page 61

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Our income tax expense includes changes in our estimated liability for exposures associated with our various tax filing
positions. At any point in time, many tax years are subject to or in the process of being audited by various taxing
authorities. To the extent our estimates of settlements change or the final tax outcome of these matters is different from
the amounts recorded, such differences will impact the income tax provision in the period in which such determinations
are made.
The Company recognizes interest related to unrecognized tax benefits in interest expense and penalties related to
unrecognized tax benefits in operating expenses in the Consolidated Statements of Income.
Recent Accounting Pronouncements
In July 2012, the FASB issued an accounting standards update (“ASU”) to simplify the manner in which entities may test
indefinite-lived intangible assets for impairment. The ASU permits an entity to first assess qualitative factors to determine
whether events and circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is
impaired as a basis for determining whether it is necessary to perform a quantitative impairment test. The ASU is effective
for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption
permitted. We will adopt the provisions of the ASU in the first quarter of fiscal 2013. We do not expect the adoption of the
ASU to have a material impact on our Consolidated Financial Statements.
In February 2013, the FASB issued an ASU that requires enhanced disclosures around the amounts reclassified out of
accumulated other comprehensive income. The amendments do not change the requirements for reporting net income or
other comprehensive income. The ASU requires an entity to present information about significant reclassifications out of
accumulated other comprehensive income and their corresponding effects on the respective line items in net income. The
ASU is effective for annual and interim reporting periods beginning after December 15, 2012 and as such, we will adopt
the disclosure provisions in the first quarter of fiscal 2013.
Note 2. Additional Financial Statement Information
Cash and Cash Equivalents and Short-Term Investments
Cash and cash equivalents and short-term investments consist of the following:
($ in millions) February 2,
2013 January 28, 2012
Cash (1) $ 942 $ 876
Bank certificates of deposit and time deposits 304 685
Money market funds 189 224
Domestic commercial paper 25 100
Cash equivalents 518 1,009
Cash and cash equivalents $ 1,460 $ 1,885
Bank certificates of deposit and time deposits $ 50 $ —
Short-term investments $ 50 $ —
__________
(1) Cash includes $71 million and $59 million of amounts in transit from banks for customer credit card and debit card transactions as of February 2,
2013 and January 28, 2012, respectively.
We did not record any impairment charges on our cash equivalents or short-term investments in fiscal 2012, 2011, or
2010.
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