Ross 2014 Annual Report Download - page 42

Notes to Consolidated Financial Statements
Note A: Summary of Significant Accounting Policies
Business. Ross Stores, Inc. and its subsidiaries (the “Company”) is an off-price retailer of first-quality, in-season, name
brand and designer apparel, accessories, footwear, and home fashions for the entire family. At the end of fiscal 2014, the
Company operated 1,210 Ross Dress for Less® (“Ross”) locations in 33 states, the District of Columbia and Guam, and 152
dd’s DISCOUNTS® stores in 15 states. The Ross and dd’s DISCOUNTS stores are supported by five distribution centers. The
Company’s headquarters, one buying office, two operating distribution centers, two warehouses, and 25% of its stores are
located in California.
Segment reporting. The Company has one reportable segment. The Company’s operations include only activities related to
off-price retailing in stores throughout the United States.
Basis of presentation and fiscal year. The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly-owned. Intercompany transactions and accounts have been eliminated. The Company
follows the National Retail Federation fiscal calendar and utilizes a 52-53 week fiscal year whereby the fiscal year ends on the
Saturday nearest to January 31. The fiscal years ended January 31, 2015, February 1, 2014 and February 2, 2013 are referred
to as fiscal 2014, fiscal 2013, and fiscal 2012, respectively. Fiscal 2014 and 2013 were each 52-week years. Fiscal 2012 was a
53-week year.
Use of accounting estimates. The preparation of consolidated financial statements in conformity with Generally Accepted
Accounting Principles in the United States of America (“GAAP”) requires the Company to make estimates and assumptions
that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates. The Company’s significant accounting estimates include valuation reserves for inventory
shortage, packaway inventory costs, useful lives of fixed assets, insurance reserves, and reserves for uncertain tax positions.
Purchase obligations. As of January 31, 2015, the Company had purchase obligations of approximately $1,953 million. These
purchase obligations primarily consist of merchandise inventory purchase orders, commitments related to construction projects,
store fixtures and supplies, and information technology service, transportation, and maintenance contracts.
Cash and cash equivalents. Cash equivalents consist of highly liquid, fixed income instruments purchased with an original
maturity of three months or less.
Restricted cash, cash equivalents, and investments. The Company has restricted cash, cash equivalents, and
investments that serve as collateral for certain insurance obligations of the Company. These restricted funds are invested in
bank deposits, money market mutual funds, U.S. Government and agency securities, and corporate securities and cannot be
withdrawn from the Company’s account without the prior written consent of the secured parties. The following table summarizes
total restricted cash, cash equivalents, and investments which were included in Prepaid expenses and other and Other long-
term assets in the Consolidated Balance Sheets as of January 31, 2015 and February 1, 2014:
Restricted Assets ($000) 2014 2013
Prepaid expenses and other $ 19,713 $ 20,734
Other long-term assets 56,107 50,763
Total
$ 75,820 $ 71,497
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