- 11 -
4. Application of Accruals for Shrinkage
Target used its accruals for shrinkage for the following
purposes: (1) financial and tax reporting, (2) to determine the
budget that would be available for the purchase of inventory in a
particular department, (3) to set goals for and to evaluate the
performance of store managers and buyers, and (4) to determine
the sources of shrinkage.
B. Target's Physical Inventories
1. In General
Target employed an outside inventory service to conduct
physical inventories of stores generally during the period
beginning with the first weekend in February and ending in
mid-October. Each store had its own physical inventory period.
Target attempted to conduct a physical inventory at each store
every 8 to 16 months; however, in rare instances, as many as
18 months elapsed between physical inventories. Except for
stores opened during the year, Target usually inventoried every
store once each year.
2. New Stores
Target generally did not conduct physical inventories of new
stores in the year that they were opened because Target believed
that such inventories produced meaningless results. Instead,
Target conducted physical inventories of new stores in the year
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011