Starbucks 2015 Annual Report Download - page 56

STARBUCKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years ended September 27, 2015, September 28, 2014 and September 29, 2013
Note 1: Summary of Significant Accounting Policies
Description of Business
We purchase and roast high-quality coffees that we sell, along with handcrafted coffee and tea beverages and a variety of fresh
food items, through our company-operated stores. We also sell a variety of coffee and tea products and license our trademarks
through other channels such as licensed stores, grocery and national foodservice accounts.
In this 10-K, Starbucks Corporation (together with its subsidiaries) is referred to as "Starbucks," the "Company," "we," "us" or
"our."
We have four reportable operating segments: 1) Americas, which is inclusive of the U.S., Canada, and Latin America; 2) China/
Asia Pacific ("CAP"); 3) Europe, Middle East, and Africa ("EMEA") and 4) Channel Development. We also have several non-
reportable operating segments, including Teavana, Seattle's Best Coffee, Evolution Fresh, and our Digital Ventures business, as
well as certain developing businesses such as the Starbucks Reserve® Roastery & Tasting Room, which are combined and
referred to as All Other Segments. Unallocated corporate operating expenses, which pertain primarily to corporate
administrative functions that support the operating segments but are not specifically attributable to or managed by any segment,
are presented as a reconciling item between total segment operating results and consolidated financial results.
Additional details on the nature of our business and our reportable operating segments are included in Note 16, Segment
Reporting, of these Consolidated Financial Statements.
Principles of Consolidation
Our consolidated financial statements reflect the financial position and operating results of Starbucks, including wholly-owned
subsidiaries and investees that we control. Investments in entities that we do not control, but have the ability to exercise
significant influence over operating and financial policies, are accounted for under the equity method. Investments in entities in
which we do 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
Our fiscal year ends on the Sunday closest to September 30. Fiscal years 2015, 2014 and 2013 included 52 weeks.
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 inventory reserves, asset and goodwill
impairments, assumptions underlying self-insurance reserves, income from unredeemed stored value cards, stock-based
compensation forfeiture rates, future asset retirement obligations, 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
We consider all highly liquid instruments with maturities of three months or less at the time of purchase, as well as credit card
receivables for sales to customers in our company-operated stores that generally settle within two to five days, to be cash
equivalents. We maintain cash and cash equivalent balances with financial institutions that exceed federally-insured limits. We
have not experienced any losses related to these balances and we believe credit risk to be minimal.
Our cash management system provides for the funding of all major bank disbursement accounts on a daily basis as checks are
presented for payment. Under this system, outstanding checks are in excess of the cash balances at certain banks, which creates
book overdrafts. Book overdrafts are presented as a current liability in accrued liabilities on our consolidated balance sheets.
52 Starbucks Corporation 2015 Form 10-K