Big Lots 2014 Annual Report Download - page 123

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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 a unique, non-traditional, discount retailer in the United States of America (“U.S.”). At January 31, 2015, we operated
1,460 stores in 48 states. Our goal is to exceed our core customer’s expectation by providing a product assortment of value-
priced merchandise that is meaningful to our core customer, combined with the quality and ease of the shopping experience.
Our value-priced merchandise is sourced through both traditional and close-out channels.
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 2014 (“2014”) is
comprised of the 52 weeks that began on February 2, 2014 and ended on January 31, 2015. Fiscal year 2013 (“2013”) was
comprised of the 52 weeks that began on February 3, 2013 and ended on February 1, 2014. Fiscal year 2012 (“2012”) was
comprised of the 53 weeks that began on January 29, 2012 and ended on February 2, 2013.
Segment Reporting
We manage our business based on one segment, discount retailing. All of our stores are located in the U.S.
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, 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 five days, and at January 31,
2015 and February 1, 2014, totaled $26.6 million and $24.5 million, respectively.
Investments
Investment securities are classified as available-for-sale, held-to-maturity, or trading at the date of purchase. Investments are
recorded at fair value as either current assets or non-current assets based on the stated maturity or our plans to either hold or sell
the investment. Unrealized holding gains and losses on trading securities are recognized in earnings. Unrealized holding gains
and losses on available-for-sale securities are recognized in other comprehensive income, until realized. We did not own any
held-to-maturity or available-for-sale securities as of January 31, 2015 and February 1, 2014.