SHLD » Topics » Long-Lived Assets

This excerpt taken from the SHLD 10-K filed Mar 12, 2010.

Long-Lived Assets

In accordance with accounting standards governing the impairment or disposal of long-lived assets, we performed an impairment test of certain of our long-lived assets (principally the value of buildings and other fixed assets associated with our stores) due to events and changes in circumstances during 2008 that indicated an impairment might have occurred. The impairment review was triggered by the increased severity of the economic turmoil and weakening in the U.S. economy during the year, which had a negative impact on the performance of our stores. As a result of this impairment testing, the Company recorded a $98 million impairment charge during 2008. This impairment charge was made up of a $21 million charge at Kmart and a $77 million charge at Sears Domestic.

These excerpts taken from the SHLD 10-K filed Mar 17, 2009.

Long-Lived Assets

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” we performed an impairment test of certain of our long-lived assets (principally the value of buildings and other fixed assets associated with our stores) due to events and changes in circumstances during 2008 that indicated an impairment might have occurred. The impairment review was triggered by the increased severity of the economic turmoil and weakening in the U.S. economy during the year, which had a negative impact on the performance of our stores. As a result of this impairment testing, the Company recorded a $98 million impairment charge during 2008. This impairment charge was made up of a $21 million charge at Kmart and a $77 million charge at Sears Domestic.

Long-Lived Assets

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” we performed an impairment test of
certain of our long-lived assets (principally the value of buildings and other fixed assets associated with our stores) due to events and changes in circumstances during 2008 that indicated an impairment might have occurred. The impairment review
was triggered by the increased severity of the economic turmoil and weakening in the U.S. economy during the year, which had a negative impact on the performance of our stores. As a result of this impairment testing, the Company recorded a $98
million impairment charge during 2008. This impairment charge was made up of a $21 million charge at Kmart and a $77 million charge at Sears Domestic.

SIZE="2">Store Closings and Severance

We made the decision to close 46 underperforming stores during fiscal 2008. These closings
include the closure of 24 stores in our Kmart segment and the closure of 22 stores in our Sears segment. We recorded charges related to these store closings of $77 million. The charges include $36 million of inventory markdowns

 


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SEARS HOLDINGS CORPORATION

ALIGN="center">Notes to Consolidated Financial Statements—(Continued)

 



recorded in cost of sales and a $41 million reserve recorded in selling and administrative expenses for store closing and severance costs. We expect to
record a charge of approximately $24 million during the first half of 2009 as these stores wind down operations.

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