Nordstrom, Inc. and subsidiaries  33
Revenue Recognition
We recognize revenue from sales at our retail stores at the point of sale, net of estimated sales returns and excluding sales taxes. Revenue 
from sales to customers shipped directly from our stores, website and catalog, which includes shipping revenue when applicable, is 
recognized upon estimated receipt by the customer. We estimate customer merchandise returns based on historical return patterns and 
reduce sales and cost of sales accordingly.
Although we believe we have sufficient current and historical knowledge to record reasonable estimates of sales returns, there is a possibility 
that actual returns could differ from recorded amounts. In the past three years, there were no significant changes in customer behavior and 
we have made no material changes to our estimates included in the calculations of our sales return reserve. A 10% change in the sales 
return reserve would have had a $10 impact on our net earnings for the year ended January 31, 2015.
Inventory
Our merchandise inventories are generally stated at the lower of cost or market value using the retail inventory method. Under the retail 
method, the valuation of inventories and the resulting gross margins are determined by applying a calculated cost-to-retail ratio to the retail 
value of ending inventory. The value of our inventory on the balance sheet is then reduced by a charge to cost of sales for retail inventory 
markdowns taken on the selling floor. To determine if the retail value of our inventory should be marked down, we consider current and 
anticipated demand, customer preferences, age of the merchandise and fashion trends. Inherent in the retail inventory method are certain 
management judgments that may affect the ending inventory valuation as well as gross margin.
We reserve for obsolescence based on historical trends and specific identification. Our obsolescence reserve contains uncertainties as the 
calculations require management to make assumptions and to apply judgment regarding a number of factors, including market conditions, 
the selling environment, historical results and current inventory trends.
We do not believe that the assumptions used in these estimates will change significantly based on prior experience. In the past three years, 
we have made no material changes to our estimates included in the calculations of the obsolescence reserve. A 10% change in the 
obsolescence reserve would have had no material impact on our net earnings for the year ended January 31, 2015.
Goodwill
We review our goodwill annually for impairment or when circumstances indicate its carrying value may not be recoverable. We perform this 
evaluation at the reporting unit level, comprised of the principal business units within our Retail segment, through the application of a two-
step fair value test. The first step compares the carrying value of the reporting unit to its estimated fair value, which is based on the expected 
present value of future cash flows (income approach), comparable public companies and acquisitions (market approach) or a combination of 
both. If fair value is lower than the carrying value, then a second step is performed to quantify the amount of the impairment. 
As part of our impairment testing, we utilize certain assumptions and apply judgment regarding a number of factors. Significant estimates in 
the market approach include identifying similar companies and acquisitions with comparable business factors such as size, growth, 
profitability, risk and return of investment and assessing comparable earnings or revenue multiples in estimating the fair value of the reporting 
unit. Assumptions in the income approach include future cash flows for the business, future growth rates and discount rates. Estimates of 
cash flows may differ from actual cash flows due to, among other things, economic conditions, changes to the business model or changes in