Costco 2002 Annual Report Download - page 33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data) (Continued)
Note 1—Summary of Significant Accounting Policies (Continued)
general corporate purposes, including stock option grants under stock option programs. To date, no shares have
been repurchased under this program.
Recent Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 143, “Accounting for Asset Retirement Obligations,” which provides the accounting re-
quirements for retirement obligations associated with tangible long-lived assets. SFAS No. 143 requires entities
to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred.
SFAS No. 143 is effective for the Company’s 2003 fiscal year. The adoption of SFAS No. 143 is not expected to
have a material impact on the Company’s consolidated results of operations, financial position or cash flows.
In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-
Lived Assets,” effective for the Company’s 2003 fiscal year. This Statement supersedes FASB Statement
No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”
and other related accounting guidance. The adoption of SFAS No. 144 is not expected to have a material impact
on the Company’s consolidated results of operations, financial position, or cash flows.
In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amend-
ment of FASB Statement No. 13, and Technical Corrections.” Among other things, this statement rescinds FASB
Statement No. 4, “Reporting Gains and Losses from Extinguishment of Debt” which required all gains and losses
from the early extinguishment of debt to be aggregated and, if material, classified as an extraordinary item, net of
the related income tax effect. As a result, the criteria in Accounting Principles Board (APB) Opinion No. 30,
“Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extra-
ordinary, Unusual and Infrequently Occurring Events and Transactions,” will now be used to classify those gains
and losses. The statement was effective upon issuance in April 2002 for prospective transactions. The adoption of
this statement had no material impact on the Company’s financial position or results of operations.
In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal
Activities.” This statement addresses financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring).” This statement requires that a liability for a cost associated with an exit or disposal activity
should be recognized at fair value when the liability is incurred. SFAS No. 146 is effective for the Company’s
2003 fiscal year. The adoption of SFAS No. 146 is not expected to have a material impact on the Company’s
consolidated results of operations, financial position or cash flows.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
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