Starbucks 2009 Annual Report Download - page 52

STARBUCKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years ended September 27, 2009, September 28, 2008 and September 30, 2007
Note 1: Summary of Significant Accounting Policies
Description of Business
Starbucks Corporation (together with its subsidiaries, “Starbucks” or the “Company”) purchases and roasts high-
quality whole bean coffees and sells them, along with fresh, rich-brewed coffees, Italian-style espresso beverages,
cold blended beverages, a variety of complementary food items, a selection of premium teas, and beverage-related
accessories and equipment, primarily through its Company-operated retail stores. Starbucks also sells coffee and tea
products and licenses its trademark through other channels such as licensed stores, and through certain of its
licensees and equity investees, Starbucks produces and sells a variety of ready-to-drink beverages. All channels
outside the Company-operated retail stores are collectively known as specialty operations. Additional details on the
nature of the Company’s business are in Item 1 of this 10-K.
Starbucks has three reportable operating segments: United States (“US”), International and Global Consumer
Products Group (“CPG”). See Note 18 for additional details.
Principles of Consolidation
The consolidated financial statements reflect the financial position and operating results of Starbucks, including
wholly owned subsidiaries and investees controlled by the Company. Investments in entities that the Company does
not control, but has the ability to exercise significant influence over operating and financial policies, are accounted
for under the equity method. Investments in entities in which Starbucks does not have the ability to exercise
significant influence are accounted for under the cost method. Intercompany transactions and balances have been
eliminated.
Fiscal Year End
Starbucks fiscal year ends on the Sunday closest to September 30. The fiscal years ended on September 27, 2009,
September 28, 2008 and September 30, 2007 all included 52 weeks. Starbucks 2010 fiscal year will include
53 weeks, with the 53
rd
week falling in its fourth fiscal quarter.
Subsequent Events
The Company evaluated subsequent events and transactions for potential recognition or disclosure in the financial
statements through November 20, 2009, the day the financial statements were issued.
Estimates and Assumptions
Preparing financial statements in conformity with accounting principles generally accepted in the United States of
America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses. Examples include, but are not limited to, estimates for asset and goodwill
impairments, stock-based compensation forfeiture rates, and future asset retirement obligations; assumptions
underlying self-insurance reserves; and the potential outcome of future tax consequences of events that have been
recognized in the financial statements. Actual results and outcomes may differ from these estimates and
assumptions.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of purchase
to be cash equivalents. The Company maintains cash and cash equivalent balances with financial institutions that
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