Big Lots 2009 Annual Report Download - page 171

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 1 — Summary of Significant Accounting Policies (Continued)
Recent Accounting Standards — Future Adoptions
In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements,
which amends ASC 820, Fair Value Measurements and Disclosures, to add new requirements for disclosures
about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and
settlements relating to Level 3 measurements. The ASU also clarifies existing fair value disclosures about the
level of disaggregation and about inputs and valuation techniques used to measure the fair value. Further, the
ASU amends guidance on employers’ disclosures about postretirement benefit plan assets under ASC 715,
Compensation-Retirement Benefits, to require that disclosures be provided by classes of assets instead of by
major categories of assets. The ASU is effective for us in the first fiscal quarter of 2010 and is not expected to
have a material effect on our financial condition, results of operations, or liquidity.
Note 2 — Property and Equipment — Net
Property and equipment – net consist of:
January 30,
2010 January 31, 2009
(In thousands)
Land and land improvements ........................................... $ 44,818 $ 44,952
Buildings and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 698,988 675,787
Fixtures and equipment ............................................... 635,377 621,617
Computer software costs .............................................. 68,175 67,166
Transportation equipment .............................................. 29,192 22,567
Construction-in-progress .............................................. 28,563 20,860
Property and equipment - cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,505,113 1,452,949
Less accumulated depreciation and amortization ...................... 1,013,857 962,908
Property and equipment - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 491,256 $ 490,041
In 2008, we acquired, for $8.6 million, two store properties we were previously leasing. The cost of these
properties was included in land and land improvements and buildings and leasehold improvements at January 30,
2010 and January 31, 2009. In prior periods, these leased properties were accounted for as operating leases.
Property and equipment - cost includes $7.8 million and $8.3 million at January 30, 2010 and January 31, 2009,
respectively, to recognize assets from capital leases. Accumulated depreciation and amortization includes
$4.3 million and $2.0 million at January 30, 2010 and January 31, 2009, respectively, related to capital leases.
We incurred $0.4 million, $0.1 million, and $0.8 million in asset impairment charges in 2009, 2008, and 2007,
respectively. These charges principally related to the write-down of long-lived assets at four, six, and three
stores identified as part of our annual store impairment review in 2009, 2008, and 2007, respectively. Asset
impairment charges are included in selling and administrative expenses in our accompanying consolidated
statements of operations. We perform annual impairment reviews of our long-lived assets at the store level.
When we perform the annual impairment reviews, we first determine which stores had impairment indicators
present. We use actual historical cash flows to determine which stores had negative cash flows in each of the
past two years (on a rolling basis). For each store with two years of negative cash flows, we obtain future cash
flow estimates based on operating performance estimates specific to each store’s operations that are based
on assumptions currently being used to develop our company level operating plans. If the net book value of a
store’s long-lived assets is not recoverable by the expected future cash flows of the store, we estimate the fair
value of the store’s assets and recognize an impairment charge for the excess net book value of the store’s long-
lived assets over their fair value. The fair value of store assets is estimated based on information available in the
marketplace for similar assets.