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Notes to Consolidated Financial Statements
$ in thousands,
except per share amounts
1. Summary of
Significant Accounting Policies
Description of Business
The Company has operated in a single business segment, selling personal
computers and other home office products, consumer electronics,
entertainment software, major appliances and related accessories
principally through its retail stores. During the fourth quarter of fiscal
2001, the Company acquired the common stock of Musicland Stores
Corporation (Musicland) and Magnolia Hi-Fi, Inc. (Magnolia Hi-Fi).
Musicland is principally a mall-based retailer of pre-recorded home
entertainment products. Magnolia Hi-Fi is a Seattle-based, high-end
retailer of audio and video products. The results of the acquired
businesses have been included in the consolidated financial statements
since the dates of acquisition (see Note 2).
Basis of Presentation
The consolidated financial statements include the accounts of Best Buy
Co., Inc. and its subsidiaries. Significant intercompany accounts and
transactions have been eliminated. All subsidiaries are wholly owned.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in the consolidated balance
sheets and statements of earnings, as well as the disclosure of contingent
liabilities. Actual results could differ from these estimates and
assumptions.
Fiscal Year
The Company’s fiscal year ends on the Saturday nearest the end of
February. Fiscal 2001 included 53 weeks, while fiscal 2000 and 1999 each
included 52 weeks.
Cash and Cash Equivalents
The Company considers short-term investments with a maturity of three
months or less when purchased to be cash equivalents. Cash equivalents are
carried at cost, which approximates market value. Restricted cash amounts
are not significant.
Recoverable Costs From Developed Properties
The costs of acquisition and development of properties which the Company
intends to sell and lease back or recover from landlords within one year
are included in current assets.
Merchandise Inventories
Merchandise inventories are recorded at the lower of cost or market. The
primary methods used to determine cost are the average cost method and the
retail inventory method. 
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