Big Lots 2007 Annual Report Download - page 133

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1 — Summary of Significant Accounting Policies
Description of Business
All references in the consolidated financial statements and these related notes to “we,” “us,” and “our” are to
Big Lots, Inc. and its subsidiaries. We are the nation’s largest broadline closeout retailer. At February 2, 2008,
we operated a total of 1,353 stores in 47 states. Our goal is to strengthen and build upon our leadership position
in broadline closeout retailing by providing our customers with great savings on brand-name closeouts and other
value-priced merchandise. You can locate us on the Internet at www.biglots.com. The contents of our websites
are not part of this report.
Basis of Presentation
The consolidated financial statements include Big Lots, Inc. and all of its subsidiaries, have been prepared in
accordance with GAAP, and include all of our accounts. We consolidate all majority-owned and controlled
subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Fiscal Year
We follow the concept of a 52-53 week fiscal year, which ends on the Saturday nearest to January 31. Unless
otherwise stated, references to years in this report relate to fiscal years rather than calendar years. Fiscal year 2007
(“2007”), was comprised of the 52 weeks that began on February 4, 2007 and ended on February 2, 2008. Fiscal year
2006 (“2006”), was comprised of the 53 weeks that began on January 29, 2006 and ended on February 3, 2007. Fiscal
year 2005 (“2005”), was comprised of the 52 weeks that began on January 30, 2005 and ended on January 28, 2006.
Segment Reporting
We manage our business based on one segment, broadline closeout retailing. At the end of 2007, 2006, and
2005, all of our operations were located within the United States of America.
Management Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates,
judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period, as well as the
related disclosure of contingent assets and liabilities at the date of the financial statements. The use of estimates,
judgments, and assumptions creates a level of uncertainty with respect to reported or disclosed amounts in
our consolidated financial statements or accompanying notes. On an on-going basis, management evaluates
its estimates, judgments, and assumptions, including those that management considers critical to the accurate
presentation and disclosure of our consolidated financial statements and accompanying notes. Management
bases its estimates, judgments, and assumptions on historical experience, current trends, and various other
factors that it believes are reasonable under the circumstances. Because of the inherent uncertainty in using
estimates, judgments, and assumptions, actual results may differ from these estimates. Management discusses
the development and selection of its critical accounting policies and estimates with the Audit Committee of our
Board of Directors. See our Critical Accounting Policies and Estimates contained within Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-K for additional
information about our accounting policies.