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Disclosure Analysis Paper

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The most important policy of the company says the financial statements include the balance of Target and its completely owned subsidiaries. Cash equivalent includes short term investments with a maturity of three months or less from the time of purchase. It has increased substantially in 2004 due to the divestment of certain business units such as Marshall Field. They carry these investments at cost, which approximates market value.

The components of these are: these investments were $1,172 million and $1,732 million in 2005 and 2004, respectively. Also included in cash equivalents are proceeds due from credit and debit card transactions with settlement terms of less than five days. Credit and debit card receivables included within cash equivalents were $285 million and $242 million, respectively, for 2005 and 2004.

Accounts receivables are recorded net of allowances for expected losses which have increased to $5,069 million in 2005 from $4,621 million in 2004 respectively. The allowance, recognized in an amount equal to the anticipated future write-offs based on delinquencies, risk scores, aging trends, industry risk trends and our historical experience, was $451 million at January 28, 2006 and $387 million at January 29, 2005. Substantially all accounts continue to accrue finance charges until they are written off. Accounts are written off when they become 180 days past due. They are also following SFAS 140 as it requires the receivables to be included of the financial subsidiaries including the trust.

Inventory is valued as per the retail inventory method using the Last In First out method. Inventories are stated at LIFO cost or market price whichever is lower. They have accumulated LIFO reserves related to the target interiors which is immaterial to the consolidated statements. The LIFO provision is calculated based on inventory levels, markup rates and internally-measured retail price indices. They have not recorded



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