Goodwill
Goodwill is the excess of the purchase price over the fair value
of identifiable net assets acquired in business combinations
accounted for under the purchase method. We periodically review
goodwill for impairment and assess whether significant events or
changes in business circumstances indicate that the carrying value
of the goodwill may not be recoverable. An impairment loss would
be recorded in the period such determination is made. Accumulated
amortization was $22 and $2 in fiscal 2002 and 2001, respectively.
See note 2 for additional discussion
regarding goodwill.
Revenue
Recognition
We recognize revenues from the sale of merchandise at the time the
merchandise is sold. We recognize service revenues at the time the
service is provided, the sales price is fixed or determinable and
collectibility is reasonably assured.
We sell
extended service contracts, called Performance Service Plans, on
behalf of an unrelated third party. In jurisdictions where we
are not deemed to be the obligor on the contract at the time of
sale, commissions are recognized in revenues at the time of
sale. In jurisdictions where we are deemed to be the obligor on
the contract at the time of sale, commissions are recognized in revenues
ratably over the term of the service contract.
Sales
Incentives
We periodically offer sales incentives that entitle our customers
to receive a reduction in the price of a product or service. For
sales incentives in which we are the obligor, the reduction
in revenues is recognized at the time the product or service is
sold.
Shipping
and Handling Costs
Amounts billed to customers for shipping and handling are included
in revenues. The related costs are included in cost of goods sold.
Foreign
Currency
Foreign currency denominated assets and liabilities are translated
into U.S. dollars using the exchange rates in effect at the
balance sheet date. Results of operations and cash flows are
translated using the average exchange rates throughout the period.
The effect of exchange rate fluctuations on translation of assets
and liabilities is recorded as a component of shareholders’
equity. Gains and losses from foreign currency transactions are
included in selling, general and administrative expenses.
Comprehensive
Income
Comprehensive income is net earnings, plus certain other items
that are recorded directly to shareholders’ equity. The only
significant item currently applicable to us is foreign currency
translation adjustments, which were not significant.
Stock-Based
Compensation
We account for employee stock-based compensation using the
intrinsic value method as prescribed under Accounting Principles
Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and related Interpretations. We also present pro forma
net earnings and earnings per share in note 4
as if we had adopted Statement of Financial Accounting Standards (SFAS)
No. 123, Accounting for Stock-Based Compensation.
Pre-Opening
Costs
Non-capital expenditures associated with opening new stores are
expensed as incurred.
Advertising
Costs
Advertising costs, which are included in selling, general and
administrative expenses, are expensed the first time the
advertisement runs. Gross advertising expenses, prior to
reimbursement through cooperative advertising agreements, for
fiscal 2002, 2001 and 2000 were $540, $479
and $374, respectively. 
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