Office Depot 2011 Annual Report Download - page 233

The accompanying consolidated financial statements of the Company are prepared in accordance with MFRS, which may vary
in certain significant respects from U.S. GAAP. Note 3 to the accompanying consolidated financial statements summarizes the
accounting policies adopted by the Company. The principal differences between MFRS and U.S. GAAP as they affect the
Company’s consolidated net income, consolidated stockholders’ equity, presentation of consolidated financial information and
the relevant disclosures are summarized below:
25
17. Differences between MFRS and accounting principles generally accepted in the United States of America (“U.S. GAA
P
”)
2011 2010 2009
(Unaudited) (Unaudited)
Consolidated net income under MFRS $728,262 $777,116 $786,024
(i) Elimination effects of inflation
30,57
0
25,467 33,876
(ii) Em
p
lo
y
ee retirement obli
g
ations (485) 2,209 96
(iii) Rent holida
y
s 411 (4,664) (771)
(v) Deferred PTU asset 79 (1,018)
—
Total U.S. GAAP ad
j
ustments 30,575 21,994 33,201
(vi) Deferred income tax effects on U.S. GAAP ad
j
ustments 22,927 (5,412) 2,256
Consolidated net income under U.S. GAAP $781,764 $ 793,698 $ 821,481
2011 2010
(Unaudited)
Consolidated stockholders’ e
q
uit
y
under MFRS (1) $5,825,437 $5,546,276
(i) Elimination effects of inflation
(449,849) (470,312)
(ii) Chan
g
e in em
p
lo
y
ee retirement obli
g
ations 1,392 (851)
(iii) Rent holida
y
s (39,600) (40,011)
(iv) Amortization of
g
oodwill 13,812 13,812
(v) Deferred PTU asset
(798) (877)
Total U.S. GAAP ad
j
ustments $(475,043) $(498,239)
(vi) Deferred income tax effects on U.S. GAAP ad
j
ustments 140,543 118,193
Consolidated stockholders’ e
q
uit
y
under U.S. GAAP $5,490,937 $5,166,230
(1) Individual adjustments to the accompanying reconciliation of stockholders’ equity include the effects of translation of
forei
g
n o
p
erations whose functional currenc
y
is different from the Mexican
p
eso.
(i)
E
limination of the effects of inflation
—
Through December 31, 2007, MFRS required the recognition of the
comprehensive effects of inflation on consolidated financial information. Beginning January 1, 2008, MFRS only
requires the recognition of the effects of inflation for entities that operate in an inflationary environment (one whose
cumulative inflation for the preceding three-year periods equals or exceeds 26%). Since that date, Mexico has
ceased to be an inflationary economic environment. However assets, liabilities and stockholders’ equity under
MFRS include the effects of inflation recognized through December 31, 2007. Additionally, certain of the
Company’s Latin American operations operate in inflationary economic environments for certain of the years
presented in the accompanying consolidated financial statements. The Company has continued to recognize the
com
p
rehensive effects of inflation for those o
p
erations.