Notes to Consolidated Financial Statements  (1) Description of Business and Basis of Preparation  (2) Summary of Significant Accounting Policies  (a) Principles of Consolidation  (b) Fiscal Year  (c) Cash and Cash Equivalents  (d) Inventories  (g) Goodwill  (f) Property and Equipment  (e) Receivables  $2.9 million and $3.5 million as of December 28, 2013 and December  29, 2012, respectively. A reserve for estimated shortage is accrued  throughout the year based on detailed historical averages. Receivables consist primarily of amounts due to the Company in  relation to tenant allowances, wholesale and corporate product sales,  franchisee royalties and product sales, certain amounts due from  taxing authorities and licensing revenue. The Company assesses the  collectability of all receivables on an ongoing basis by considering  its historical credit loss experience, current economic conditions,  and other relevant factors. Based on this analysis, the Company has  determined that no material allowance for doubtful accounts was  necessary at either December 28, 2013 and December 29, 2012.  Build-A-Bear Workshop, Inc. (the Company) is a specialty retailer of  plush animals and related products. The Company began operations  in October 1997. The Company sells its products through its 323  company-owned stores operated primarily in leased locations in  malls in the United States, Canada, Puerto Rico, the United Kingdom  and Ireland along with its Web sites. Operations in foreign countries  where the Company does not have company-owned stores are  through franchise agreements.  Certain reclassifications of prior year amounts have been made to  conform to current year presentation, none of which impact net loss  in any period.  A summary of the Company’s significant accounting policies applied  in the preparation of the accompanying consolidated financial  statements follows:  Property and equipment consist of leasehold improvements,  furniture and fixtures, computer equipment and software, building  and land and are stated at cost. Leasehold improvements are  depreciated using the straight-line method over the shorter of the  useful life of the assets or the life of the lease which is generally  ten years. Furniture and fixtures and computer equipment are  depreciated using the straight-line method over the estimated  service lives ranging from three to seven years. Computer software  is amortized using the straight-line method over a period of  three to five years. New store construction deposits are recorded  at the time the deposit is made as construction-in-progress and  reclassified to the appropriate property and equipment category at  the time of completion of construction, when operations of the store  commence. Maintenance and repairs are expensed as incurred and  improvements are capitalized. Gains or losses on the disposition of  fixed assets are recorded upon disposal.  The accompanying consolidated financial statements include the  accounts of Build-A-Bear Workshop, Inc. and its wholly-owned  subsidiaries. All significant intercompany accounts are eliminated in  consolidation.  The Company operates on a 52- or 53-week fiscal year ending on the  Saturday closest to December 31. The periods presented in these  financial statements are the fiscal years ended December 28, 2013  (fiscal 2013), December 29, 2012 (fiscal 2012) and December 31, 2011  (fiscal 2011). All fiscal years presented included 52 weeks. References  to years in these financial statements relate to fiscal years or year  ends rather than calendar years.  Goodwill is tested for impairment annually or more frequently if  events or changes in circumstances indicate that the asset might  be impaired. This testing requires comparison of the carrying  value of the reporting unit to its fair value and a reconciliation to  the Company’s total market capitalization, and when appropriate,  the carrying value of impaired assets is reduced to fair value. The  calculation of fair value requires multiple assumptions regarding  our future operations to determine future cash flows, including but  not limited to, sales volume, margin rates, store growth rates and  discount rates, all of which are Level 3 fair value inputs. In 2012, we  performed our annual evaluation of our goodwill as of December 29,  2012. As a result of the sustained decline in the market price of our  common stock, coupled with the decline in the performance of the  UK reporting unit, we determined that the fair value of the reporting  unit, estimated using discounted cash flow analysis and reconciled to  our market capitalization, was less than its carrying value. As a result,  an impairment charge of $33.7 million was recorded as a component  of net loss before income taxes in the Retail segment. This  Cash and cash equivalents include cash and short-term highly liquid  investments with an original maturity of three months or less held in  both domestic and foreign financial institutions.  The majority of the Company’s cash and cash equivalents exceed  federal deposit insurance limits. The Company has not experienced  any losses in such accounts and management believes that the  Company is not exposed to any significant credit risk on cash and  cash equivalents.  Inventories are stated at the lower of cost or market, with cost  determined on an average-cost basis. Inventory includes supplies of  38  BUILD-A-BEAR WORKSHOP, INC.  2013 FORM 10-K