SEC Comment Letter for COSTCO WHOLESALE (COST) — Apr 12, 2012
COSTCO WHOLESALE CORP /NEW (COST) (CIK 0000909832)
Date: April 12, 2012 · CIK: 0000909832 · Accession: 0000000000-12-018572
AI Filing Summary & Sentiment
Reasoning
Letter
April 12, 2012 Via E-mail Richard A. Galanti Executive Vice President, Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027 Re: Costco Wholesale Corporation Form 10-K for the Fiscal Year Ended August 28, 2011 Filed October 14, 2011 Response dated March 22, 2012 File No. 0-20355
Dear Mr. Galanti: We have reviewed your response and have th e following additional comment. In our comment, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advi sing us when you will provide the requested response. If you do not believe our comment applies to your fact s and circumstances or do not believe an amendment is appropriate, pl ease tell us why in your response.
After reviewing any amendment to your filing and the information you provide in response to this comment, we may have additional comments. Form 10-K for the Fiscal Year Ended August 28, 2011
Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 21 Results of Operations, page 22
1. We note your response to comment 2 a nd your discussion of significant LIFO adjustments at each period end to reflect th e inflationary and deflationary trends in explaining the change in gross profit margins. We also note from Note 1 on page 52 that you applied LIFO inventory in accounting for the US inventories and that you adjusted LIFO inventory to give effect to inflation or deflation at each period end. In that regard, please explain to us in further detail how the adjustments work by providing us an example along with the journal en tries in recording them. Als o, the adjustments appear to
Richard A. Galanti Costco Wholesale Corporation April 12, 2012 Page 2
write up your LIFO inventory to FIFO basis in an inflationary cost environment. If so, explain to us why it is appropr iate to do so under US GAAP.
You may contact Robert Babul a, Staff Accountant, at ( 202) 551-3339 or me at (202) 551- 3377 if you have questions regarding our comment or any other questions.
Sincerely,
/s/ Andrew D. Mew
Andrew D. Mew Accounting Branch Chief
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April 12, 2012
Via E-mail
Richard A. Galanti Executive Vice President, Chief Financial Officer Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027
Re: Costco Wholesale Corporation
Form 10-K for the Fiscal Year Ended August 28, 2011
Filed October 14, 2011 Response dated March 22, 2012 File No. 0-20355
Dear Mr. Galanti:
We have reviewed your response and have th e following additional comment. In our
comment, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response. If you do not believe our comment applies to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
After reviewing any amendment to your filing and the information you provide in
response to this comment, we may have additional comments. Form 10-K for the Fiscal Year Ended August 28, 2011
Item 7—Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 21
Results of Operations, page 22
1. We note your response to comment 2 a nd your discussion of significant LIFO
adjustments at each period end to reflect th e inflationary and deflationary trends in
explaining the change in gross profit margins. We also note from Note 1 on page 52 that
you applied LIFO inventory in accounting for the US inventories and that you adjusted
LIFO inventory to give effect to inflation or deflation at each period end. In that regard,
please explain to us in further detail how the adjustments work by providing us an
example along with the journal en tries in recording them. Als o, the adjustments appear to
Richard A. Galanti Costco Wholesale Corporation April 12, 2012 Page 2
write up your LIFO inventory to FIFO basis in an inflationary cost environment. If so,
explain to us why it is appropr iate to do so under US GAAP.
You may contact Robert Babul a, Staff Accountant, at ( 202) 551-3339 or me at (202) 551-
3377 if you have questions regarding our comment or any other questions.
Sincerely,
/s/ Andrew D. Mew
Andrew D. Mew Accounting Branch Chief