The Gap 2013 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2013 The Gap annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 110

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110

40
Notes to Consolidated Financial Statements
For the Fiscal Years Ended February 1, 2014, February 2, 2013, and January 28, 2012
Note 1. Organization and Summary of Significant Accounting Policies
Organization
The Gap, Inc., a Delaware Corporation, is a global retailer offering apparel, accessories, and personal care
products for men, women, and children under the Gap, Banana Republic, Old Navy, Piperlime, Athleta, and
Intermix brands. We have Company-operated stores in the United States, Canada, the United Kingdom, France,
Ireland, Japan, Italy, China, Hong Kong, and beginning in March 2014, Taiwan. We also have franchise
agreements with unaffiliated franchisees to operate Gap, Banana Republic, and Old Navy stores in many other
countries around the world. In addition, our products are available to customers online through Company-owned
websites and through use of third parties that provide logistics and fulfillment services.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of The Gap, Inc. and its subsidiaries. All
intercompany transactions and balances have been eliminated.
Fiscal Year and Presentation
Our fiscal year is a 52-week or 53-week period ending on the Saturday closest to January 31. The fiscal years
ended February 1, 2014 (fiscal 2013) and January 28, 2012 (fiscal 2011) consisted of 52 weeks. The fiscal year
ended February 2, 2013 (fiscal 2012) consisted of 53 weeks.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents and Short-Term Investments
Cash includes funds deposited in banks as well as amounts in transit from banks for customer credit card and
debit card transactions that process in less than seven days.
All highly liquid investments with original maturities of 91 days or less are classified as cash equivalents. Highly
liquid investments with original maturities of greater than 91 days that will mature less than one year from the
balance sheet date are classified as short-term investments. Our cash equivalents and short-term investments
are placed primarily in money market funds, time deposits, and commercial paper and are classified as held-to-
maturity based on our positive intent and ability to hold the securities to maturity. We value these investments at
their original purchase prices plus interest that has accrued at the stated rate. Income related to these securities
is recorded in interest income in the Consolidated Statements of Income.
Restricted Cash
Restricted cash consists primarily of cash that serves as collateral for our insurance obligations. Any cash that is
legally restricted from use is classified as restricted cash. If the purpose of restricted cash relates to acquiring a
long-term asset, liquidating a long-term liability, or is otherwise unavailable for a period longer than one year from
the balance sheet date, the restricted cash is included in other long-term assets. Otherwise, restricted cash is
included in other current assets in the Consolidated Balance Sheets.