Express 2011 Annual Report Download - page 56

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Description of Policy Judgments and Uncertainties
Effect if Actual Results Differ from
Assumptions
Claims and Contingencies
We are subject to various claims and
contingencies related to legal,
regulatory, and other matters arising
out of the normal course of business.
Our determination of the treatment of
claims and contingencies in our
Consolidated Financial Statements is
based on management’s view of the
expected outcome of the applicable
claim or contingency. Management
may also use outside legal advice on
matters related to litigation to assist
in the estimating process.
We accrue a liability if the likelihood
of an adverse outcome is probable
and the amount is reasonably
estimable. We re-evaluate these
assessments on a quarterly basis or as
new material information becomes
available to determine whether a
liability should be established or if
any existing liability should be
adjusted.
Our liability for claims and
contingencies contain uncertanties
because the eventual outcome will
result from future events.
Additionally, the determination of
current accruals requires estimates
and judgments related to future
changes in facts and
circumstances, differing
interpretations of the law,
assessments of the amount of
damages, and the effectiveness of
strategies or other factors beyond
our control.
We have not made any material
changes in the accounting
methodology used to establish our
liability for claims and
contingencies over the past 3
years.
We have no reason to believe that
there will be a material change in
our accrual or the assumptions we
use to establish the accrual for
claims and contingencies.
However, if actual results are not
consistent with our estimates or
expectations of the eventual
outcomes of cases, we may be
exposed to gains or losses that
could be material and our cash
flow could be materially impacted.
48