Target 2010 Annual Report Download - page 67

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13. Property and Equipment
Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using
the straight-line method over estimated useful lives or lease terms if shorter. We amortize leasehold improvements
purchased after the beginning of the initial lease term over the shorter of the assets’ useful lives or a term that
includes the original lease term, plus any renewals that are reasonably assured at the date the leasehold
improvements are acquired. Depreciation expense for 2010, 2009 and 2008 was $2,060 million, $1,999 million and
$1,804 million, respectively. For income tax purposes, accelerated depreciation methods are generally used.
Repair and maintenance costs are expensed as incurred and were $726 million in 2010, $632 million in 2009 and
$609 million in 2008. Facility pre-opening costs, including supplies and payroll, are expensed as incurred.
Estimated Useful Lives Life (in years)
Buildings and improvements 8-39
Fixtures and equipment 3-15
Computer hardware and software 4-7
Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the
asset’s carrying value may not be recoverable. Impairments of $28 million in 2010, $49 million in 2009 and $2 million
in 2008 were recorded as a result of the reviews performed. Additionally, due to project scope changes, we wrote off
capitalized construction in progress costs of $6 million in 2010, $37 million in 2009 and $26 million in 2008.
14. Other Noncurrent Assets
Other Noncurrent Assets January 29, January 30,
(millions) 2011 2010
Company-owned life insurance investments (a) $358 $319
Goodwill and intangible assets 223 239
Interest rate swaps (b) 139 131
Other 279 140
Total $999 $829
(a) Company-owned life insurance policies on approximately 4,000 team members who are designated highly compensated under the Internal
Revenue Code and have given their consent to be insured. Amounts are presented net of loans that are secured by some of these policies.
(b) See Notes 8 and 20 for additional information relating to our interest rate swaps.
15. Goodwill and Intangible Assets
Goodwill and intangible assets are recorded within other noncurrent assets. Goodwill totaled $59 million at
January 29, 2011 and January 30, 2010. Goodwill and indefinite-lived intangible assets are not amortized; instead,
they are tested for impairment annually and whenever events or changes in circumstances indicate the carrying
value of the asset may not be recoverable. Definite-lived intangible assets are amortized over their expected
economic useful life and are tested for impairment whenever events or changes in circumstances indicate the
carrying value of the asset may not be recoverable. Discounted cash flow models are used in determining fair value
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PART II