Ross 2009 Annual Report Download - page 42

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— 40 —
Self-insurance. The Company is self-insured for workers’ compensation, general liability insurance costs and costs of certain
medical plans. The self-insurance liability is determined actuarially, based on claims filed and an estimate of claims incurred but
not yet reported. Self-insurance reserves as of January 30, 2010 and January 31, 2009 consisted of the following:
($000) 2009 2008
Workers’ Compensation $ 61,525 $ 57,466
General Liability 19,196 18,294
Medical Plans 3,107 3,166
Total $ 83,828 $ 78,926
Workers’ compensation and self-insured medical plan liabilities are included in accrued payroll and benefits and accruals for
general liability are included in accrued expenses and other in the accompanying consolidated balance sheets.
Other long-term liabilities. Other long-term liabilities as of January 30, 2010 and January 31, 2009 consisted of the following:
($000) 2009 2008
Deferred rent $ 58,954 $ 57,428
Deferred compensation 50,706 37,304
Tenant improvement allowances 26,559 29,818
Income taxes (See Note F) 33,570 26,019
Other 4,754 6,157
Total $ 174,543 $ 156,726
Lease accounting. When a lease contains “rent holidays” or requires fixed escalations of the minimum lease payments, the
Company records rental expense on a straight-line basis over the term of the lease and the difference between the average
rental amount charged to expense and the amount payable under the lease is recorded as deferred rent. The Company
amortizes deferred rent on a straight-line basis over the lease term commencing on the possession date. Tenant improvement
allowances are included in other long-term liabilities and are amortized over the lease term. Changes in tenant improvement
allowances are included as a component of operating activities in the consolidated statements of cash flows.
Estimated fair value of financial instruments. The carrying value of cash and cash equivalents, short- and long-term
investments, accounts receivable, and accounts payable approximates their estimated fair value. See Note B and Note D for
additional fair value information.
Revenue recognition. The Company recognizes revenue at the point of sale and maintains an allowance for estimated future
returns. Sales of gift cards are deferred until they are redeemed for the purchase of Company merchandise. Sales tax collected
is not recognized as revenue and is included in accrued expenses and other.