Fair Value Disclosures
|12 Months Ended|
Jan. 28, 2012
|Fair Value Disclosures [Abstract]|
|Fair Value Disclosures||
9) Fair Value Disclosures
In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value, as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Significant observable inputs other than quoted prices in active markets for similar assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Significant unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.
REIT Assets Measured on a Recurring Basis
We determined the fair value of our investments in REITs using quoted market prices. As of January 28, 2012 and January 29, 2011, our REITs had a cost basis of $80 million. Our REIT assets measured at fair value on a recurring basis were as follows:
Other Non-Financial Assets Measured on a Non-Recurring Basis
In 2011, eight underperforming department stores with a carrying value of $68 million were written down to their fair value of $10 million and resulted in an impairment charge of $58 million, which was included in real estate and other, net in the Consolidated Statement of Operations for the period (see Note 18). The inputs to determine fair values were primarily based on projected discounted cash flow as well as other market information obtained from brokers.
The following table presents fair values for those assets measured at fair value during 2011 on a non-recurring basis, and remaining on our Consolidated Balance Sheet:
In 2010, primarily one underperforming department store with a carrying value of $3 million was impaired, which resulted in a $3 million charge to earnings and no remaining fair value.
Other Financial Instruments
Carrying values and fair values of financial instruments that are not carried at fair value in the Consolidated Balance Sheets are as follows:
The fair value of long-term debt is estimated by obtaining quotes from brokers or is based on current rates offered for similar debt. The cost investment is for equity securities that are not publicly traded and their fair values are not readily determinable; however, we believe the carrying value approximates or is less than the fair value.
As of January 28, 2012 and January 29, 2011, the fair values of cash and cash equivalents, accounts payables and current installments of long-term debt approximate carrying values due to the short-term nature of these instruments. These items have been excluded from the table above with the exception of the current installments of long-term debt.
Concentrations of Credit Risk
We have no significant concentrations of credit risk.
The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.
Reference 1: http://www.xbrl.org/2003/role/presentationRef