Staples 2007 Annual Report Download - page 119

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STAPLES, INC. AND SUBSIDIARIES
Notes To Consolidated Financial Statements (Continued)
NOTE A Summary of Significant Accounting Policies (Continued)
equity. SFAS No. 160 also changes the manner in which the net income of the subsidiary is reported and disclosed in the
controlling company’s income statement. SFAS No. 160 also establishes guidelines for accounting for changes in
ownership percentages and for deconsolidation. SFAS No. 160 is effective for financial statements for fiscal years
beginning on or after December 1, 2008 and interim periods within those years. The adoption of SFAS No. 160 is not
expected to have a material impact on the Company’s financial position, results of operations or cash flows.
Reclassifications: Certain previously reported amounts have been reclassified to conform with the current period
presentation.
NOTE B Business Acquisitions and Equity Method Investments
In accordance with SFAS No. 141 ‘‘Business Combinations’’, Staples records acquisitions under the purchase
method of accounting. Accordingly, the purchase price is allocated to the tangible assets and liabilities and intangible
assets acquired, based on their estimated fair values. The excess purchase price over the fair value is recorded as
goodwill. Under SFAS No. 142, goodwill and purchased intangibles with indefinite lives are not amortized but are
reviewed for impairment annually, or more frequently, if impairment indicators arise. Purchased intangibles with definite
lives are amortized over their respective useful lives.
During 2007, the Company paid an aggregate of $188.3 million to acquire all or a majority interest in certain
delivery businesses headquartered in the United States and China. Additionally, in 2007 the Company made an
investment in a joint venture in India.
During 2007, the Company recorded $181.1 million of goodwill and $20.7 million of intangible assets for all
acquisitions and investments completed in 2007, of which $38.0 million of goodwill is expected to be deductible for tax
purposes. The $20.7 million recorded for intangible assets was assigned to trade names and customer related intangible
assets that will be amortized over a weighted average life of 8.1 years.
NOTE C Accrued Expenses and Other Current Liabilities
The major components of accrued liabilities are as follows (in thousands):
February 2, February 3,
2008 2007
Taxes ............................................................... $ 233,542 $ 284,094
Employee related ...................................................... 247,374 268,046
Acquisition and store closure reserves ....................................... 41,130 48,798
Advertising and marketing ................................................ 79,977 82,985
Other ............................................................... 423,341 403,107
Total .............................................................. $1,025,364 $1,087,030
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