Big Lots 2012 Annual Report Download - page 127

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1 — Basis of Presentation and Summary of Significant Accounting Policies
Description of Business
We are North America’s largest broadline closeout retailer. At February 2, 2013, we operated 1,574 stores in
two countries: the United States of America (“U.S.”) and Canada. 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 accounting principles generally accepted in the United States of America (“GAAP”), and
include all of our accounts. We consolidate all majority-owned and controlled subsidiaries. All intercompany
accounts and transactions have been eliminated.
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 ongoing 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.
Fiscal Periods
Our fiscal year ends on the Saturday nearest to January 31, which results in fiscal years consisting of 52 or
53 weeks. Unless otherwise stated, references to years in this report relate to fiscal years rather than calendar
years. Fiscal year 2012 (“2012”) is comprised of the 53 weeks that began on January 29, 2012 and ended on
February 2, 2013. Fiscal year 2011 (“2011”) was comprised of the 52 weeks that began on January 30, 2011 and
ended on January 28, 2012. Fiscal year 2010 (“2010”) was comprised of the 52 weeks that began on January 31,
2010 and ended on January 29, 2011.
Segment Reporting
We manage our broadline closeout retailing business based on two segments: the U.S. and Canada. At the end of
2010, we operated only one segment as all of our operations were located within the U.S. at that time.
Cash and Cash Equivalents
Cash and cash equivalents primarily consist of amounts on deposit with financial institutions, outstanding
checks, credit and debit card receivables, and highly liquid investments, including money market funds and
variable rate demand notes, which are unrestricted to withdrawal or use and which have an original maturity of
three months or less. We review cash and cash equivalent balances on a bank by bank basis in order to identify
book overdrafts. Book overdrafts occur when the amount of outstanding checks exceed the cash deposited at
a given bank. We reclassify book overdrafts, if any, to accounts payable on our consolidated balance sheets.
Amounts due from banks for credit and debit card transactions are typically settled in less than seven days, and
at February 2, 2013 and January 28, 2012, totaled $24.6 million and $34.5 million, respectively.