| Summary of Significant Accounting Policies and Recent Accounting Pronouncements | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fiscal Year The Company's fiscal year end is on the Friday preceding the Saturday closest to January 31 each year. The fiscal periods in this report are presented as follows, unless the context otherwise requires: Fiscal Year Ended Weeks 2017 February 2, 2018 53 2016 January 27, 2017 52 2015 January 29, 2016 52 Seasonality The Company's operations have historically been seasonal, with a disproportionate amount of net revenue occurring in the fourth fiscal quarter, reflecting increased demand during the year-end holiday selling season. The impact of seasonality on results of operations is more pronounced since the level of certain fixed costs, such as occupancy and overhead expenses, do not vary with sales. The Company's results of operations also may fluctuate based upon such factors as the timing of certain holiday seasons and promotions, the amount of net revenue contributed by new and existing stores, the timing and level of markdowns, competitive factors, weather and general economic conditions. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportable amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents consist of highly liquid temporary instruments purchased with original maturities of three months or less and includes deposits in-transit from banks for payments related to third-party credit card and debit card transactions within cash. Restricted cash The Company classifies cash balances pledged as collateral as Restricted cash on the Consolidated Balance Sheets. Allowance for Doubtful Accounts The Company provides an allowance for doubtful accounts based on both historical experience and specific identification. Allowances for doubtful accounts on accounts receivable balances were $0.6 million as of February 2, 2018 and January 27, 2017 . Accounts receivable balance is presented net of the Company's allowance for doubtful accounts and is comprised of various customer-related accounts receivable. Changes in the balance of the allowance for doubtful accounts are as follows: (in thousands) Fiscal 2017 Fiscal 2016 Fiscal 2015 Beginning balance $ 579 $ 626 $ 688 Provision 187 281 286 Write-offs (129 ) (328 ) (348 ) Ending balance $ 637 $ 579 $ 626 Inventory Inventories primarily consist of merchandise purchased for resale. For financial reporting and tax purposes, the Company's United States inventory, primarily merchandise held for sale, is stated at last-in, first-out ("LIFO") cost, which is lower than market. The Company accounts for its non-United States inventory on the first-in, first-out ("FIFO") method. The United States inventory accounted for using the LIFO method was 88% and 90% of total inventory as of February 2, 2018 and January 27, 2017 , respectively. If the FIFO method of accounting for inventory had been used, the effect on inventory would have been $1.0 million and $0.3 million as of February 2, 2018 and January 27, 2017 , respectively. The Company maintains a reserve for excess and obsolete inventory. The reserve is calculated based on historical experience related to liquidation/disposal of identified inventory. The excess and obsolescence reserve balances were $12.1 million and $20.1 million as of February 2, 2018 and January 27, 2017 , respectively. In Fiscal 2016, the Company sold approximately $3.8 million of inventory in exchange for marketing trade credits. This was recorded as a non-monetary transaction and the trade credits receivable was recorded at the value of the inventory exchanged. The Company had approximately $0.9 million and $1.0 million of trade credits receivable recorded in Accounts receivable, net as of both February 2, 2018 and January 27, 2017 , respectively, and an additional $3.5 million and $3.6 million of trade credits receivable recorded in Other assets as of February 2, 2018 and January 27, 2017 , respectively, based on the time period in which the credits are expected to be used. Trade credit receivable balances include credits recorded in prior years. Deferred Catalog Costs and Marketing Costs incurred for direct response marketing consist primarily of catalog production and mailing costs that are generally amortized within two months from the date catalogs are mailed. Unamortized marketing costs reported as prepaid assets were $13.7 million and $12.7 million as of February 2, 2018 and January 27, 2017 , respectively. The Company expenses the costs of marketing for website, magazine, newspaper, radio and other general media when the marketing takes place. Marketing expenses, including catalog costs amortization, website-related costs and other print media were $186.4 million , $193.2 million and $199.0 million for Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , respectively. These costs are included within Selling and administrative expenses in the accompanying Consolidated Statements of Operations . Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Additions and substantial improvements are capitalized and include expenditures that materially extend the useful lives of existing facilities and equipment. Maintenance and repairs that do not materially improve or extend the lives of the respective assets are expensed as incurred. As of the balance sheet dates, Property and equipment, net consisted of the following: (in thousands) Asset Lives February 2, 2018 January 27, 2017 Land — $ 3,533 $ 3,466 Buildings and improvements 15-30 100,122 98,213 Furniture, fixtures and equipment 3-10 69,940 78,563 Computer hardware and software 3-10 122,336 82,491 Leasehold improvements 3-7 10,329 11,176 Assets in development 23,428 34,882 Gross property and equipment 329,688 308,791 Accumulated depreciation (193,187 ) (185,955 ) Total property and equipment, net $ 136,501 $ 122,836 As of February 2, 2018 and January 27, 2017 , assets in development relate primarily to technological investments in the ERP system. Assets placed in service related to the ERP system as of February 2, 2018 were $35.5 million . Depreciation expense is recorded over the estimated useful lives of the respective assets using the straight-line method. Leasehold improvements are depreciated over the shorter of the associated lease term or the estimated useful life of the asset. Depreciation expense was $24.9 million , $19.0 million and $17.4 million for Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , respectively. Impairment of Property and Equipment Property and equipment are subject to a review for impairment if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the sum of the expected future undiscounted cash flows generated by an asset or asset group is less than its carrying amount, the Company then determines the fair value of the asset generally by using a discounted cash flow model. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value as determined based on quoted market prices or through the use of other valuation techniques. There were no impairments of property and equipment recognized in Fiscal 2017 , Fiscal 2016 or Fiscal 2015 . Goodwill and Indefinite-lived Intangible Asset Impairment Assessments Goodwill and the indefinite-lived trade name intangible asset are tested separately for impairment on an annual basis, or are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company's goodwill and trade name intangible asset were originally valued in connection with Kmart Holding Corporation's acquisition of Sears Roebuck in March 2005. The Company's impairment evaluation contains multiple uncertainties because it requires management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting cash flows under different scenarios. Lands' End performs annual goodwill and indefinite-lived intangible asset impairment tests on the last day of the Company's November accounting period each year and updates the tests between annual tests if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying amount. However, if actual results fall short of the Company's estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to losses that could be material. Goodwill impairment assessments . Our goodwill resides in the Direct reporting unit. The Company tests goodwill for impairment using a one-step quantitative test. The quantitative test compares the reporting unit's fair value to its carrying value. An impairment is recorded for any excess carrying value above the reporting unit's fair value, not to exceed the amount of goodwill. The Company estimates fair value using a discounted cash flow model, commonly referred to as the income approach. The income approach uses a reporting unit's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions appropriate to the Company's reporting unit. The projection uses management's best estimates of economic and market conditions over the projected period using the best information available, including growth rates in revenues, costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. This approach is consistent with the annual impairment evaluation for Fiscal 2016. The Company adjusted the valuation methodology in Fiscal 2016 to only rely on the discounted cash flow valuation due to the lack of comparable market participants in both Fiscal 2017 and Fiscal 2016. In Fiscal 2015, a market approach was also used, and the Company's final estimate of the fair value of the reporting unit was developed by weighting the fair values determined through both the market participant and income approaches. The market approach determines a value of the reporting unit by deriving market multiples for the reporting unit based on assumptions potential market participants would use in establishing a bid price for the reporting unit, however, this method is dependent on the availability of comparable market participant information. If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist. During Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , the fair value of the reporting unit exceeded the carrying value by 22.9% , 17.1% and 23.8% , respectively, and as such, the Company did not record any goodwill impairment charges. Indefinite-lived intangible asset impairment assessments. The Company's indefinite-lived intangible asset, the Lands' End trade name, resides in the Direct reporting unit. Lands' End reviews the trade name for impairment by comparing the carrying amount to its fair value. The Company considers the income approach when testing the indefinite-lived intangible asset for impairment on an annual basis. Lands' End determined that the income approach, specifically the relief from royalty method, was most appropriate for analyzing the Company's indefinite-lived asset. This method is based on the assumption that, in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset class. The relief from royalty method involves two steps: (1) estimation of reasonable royalty rates for the assets and (2) the application of these royalty rates to a net revenue stream and discounting the resulting cash flows to determine a present value. The Company multiplied the selected royalty rate by the forecasted net revenue stream to calculate the cost savings (relief from royalty payment) associated with the asset. The cash flows are then discounted to present value using the selected discount rate and compared to the carrying value of the asset. In Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , the Company tested the indefinite-lived intangible assets as required. As a result of this testing, in Fiscal 2016 and Fiscal 2015 the Company recorded a non-cash pretax trade name impairment charge to the Direct segment of approximately $173.0 million and $98.3 million , respectively, to the Intangible asset impairment line in the Consolidated Statements of Operations. During Fiscal 2017 , the fair value exceeded the carrying value by 9.7% , and as such, no trade name impairment charges were recorded. Financial Instruments with Off-Balance-Sheet Risk The Company entered into the Current ABL Facility on November 16, 2017, which provides for maximum borrowings of $ 175.0 million for the Company, subject to a borrowing base. The Current ABL Facility has a letter of credit sub-limit of $ 70.0 million and will mature no later than November 16, 2022, subject to customary extension provisions provided for therein. The Current ABL Facility is available for working capital and other general corporate purposes, and was undrawn, other than for letters of credit. Also on November 16, 2017, the Company terminated all loan related documents of the Prior ABL Facility and repaid all outstanding amounts thereunder. See Note 3 , Debt . Fair Value of Financial Instruments The Company determines the fair value of financial instruments in accordance with accounting standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in accordance with GAAP. Under fair value measurement accounting standards, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The Company reports or discloses the fair value of financial assets and liabilities based on the fair value hierarchy prescribed by accounting standards for fair value measurements, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. Total accounts receivable were $49.9 million and $39.3 million as of February 2, 2018 and January 27, 2017 , respectively. Bad debt expense was $0.2 million , $0.3 million and $0.3 million in Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , respectively. At February 2, 2018 and January 27, 2017 accounts receivable included $2.0 million and $3.7 million , respectively, due from Sears Holdings. Cash and cash equivalents, Accounts receivable, Accounts payable and Other current liabilities are reflected in the Consolidated Balance Sheets at cost, which approximates fair value due to the short-term nature of these instruments. Long-term debt, net is reflected in the Consolidated Balance Sheets at amortized cost. The fair value of debt was determined utilizing level 2 valuation techniques based on the closing inactive market bid price on February 2, 2018 and January 27, 2017 . See Note 7 , Fair Value of Financial Assets and Liabilities . Foreign Currency Translations and Transactions The Company translates the assets and liabilities of foreign subsidiaries from their respective functional currencies to United States dollars at the appropriate spot rates as of the balance sheet date. Revenue and expenses of operations are translated to United States dollars using weighted average exchange rates during the year. The foreign subsidiaries use the local currency as their functional currency. The effects of foreign currency translation adjustments are included as a component of Accumulated other comprehensive loss in the accompanying Consolidated Statements of Changes in Stockholders' Equity. The Company recognized a gain of $4.8 million in Fiscal 2017 , an insignificant amount in Fiscal 2016 and a loss of $5.7 million in Fiscal 2015 in the accompanying Consolidated Statements of Operations . Revenue Recognition Revenues include sales of merchandise and delivery revenues related to merchandise sold. Revenue is recognized for the Direct segment when the merchandise is expected to be received by the customer and for the Retail segment at the time of sale in the store. Net revenues are reported net of estimated returns and allowances and exclude sales taxes. Estimated returns and allowances are recorded as a reduction of sales and cost of sales. The reserve for sales returns and allowances is calculated based on historical experience and future expectations and is included in Other current liabilities on the Consolidated Balance Sheets. Reserves for sales returns and allowances consisted of the following: (in thousands) Fiscal 2017 Fiscal 2016 Fiscal 2015 Beginning balance $ 11,794 $ 12,605 $ 13,868 Provision 159,440 143,410 166,579 Write-offs (160,101 ) (144,221 ) (167,842 ) Ending balance $ 11,133 $ 11,794 $ 12,605 The Company sells gift certificates, gift cards and e-certificates (collectively, "gift cards") to customers through both the Direct and Retail segments. The gift cards do not have expiration dates. Revenue from gift cards are recognized when (i) the gift card is redeemed by the customer for merchandise, or (ii) after three years when the likelihood of the gift card being redeemed by the customer is remote ("gift card breakage") and the Company does not have a legal obligation to remit the value of the unredeemed gift cards to the relevant jurisdictions. Revenue recognized from gift card breakage was $1.6 million , $2.3 million and $2.2 million in Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , respectively. Cost of Sales Cost of sales are comprised principally of the costs of merchandise, in-bound freight, duty, warehousing and distribution (including receiving, picking, packing, store delivery and value added costs), customer shipping and handling costs and physical inventory losses. Depreciation and amortization is not included in the Company's Cost of sales. The Company participates in Sears Holdings' SYW program. The expenses for this program are recorded in Cost of sales, as described in Note 11 , Related Party Agreements and Transactions. Selling and Administrative Expenses Selling and administrative expenses are comprised principally of payroll and benefits costs for direct, retail and corporate employees, marketing, occupancy costs of retail stores and corporate facilities, buying, pre-opening costs and other administrative expenses. All stock-based compensation is recorded in Selling and administrative expenses. See Note 5 , Stock-Based Compensation . Selling and administrative expenses included $47.1 million , $52.9 million and $56.6 million in Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , respectively, of costs allocated or charged to the Company by Sears Holdings. See Note 11 , Related Party Agreements and Transactions . Restructuring Costs During Fiscal 2017, the Company implemented an initiative to right-size its New York Office in an effort to create efficiencies and refocus the Company back to its corporate headquarters in Dodgeville, Wisconsin. The restructuring included certain headcount reductions and the exit of a facility. The total restructuring charge expected as a result of this action is approximately $4.2 million , of which $3.9 million has been incurred as of February 2, 2018. The following table summarizes the activity of the Company's restructuring accrual: (in thousands) Termination Costs Other Costs Total Balance as of January 27, 2017 $ — $ — $ — Provision 2,401 1,520 3,921 Cash disbursements (1,793 ) — (1,793 ) Non-cash items — 546 546 Balance as of February 2, 2018 $ 608 $ 2,066 $ 2,674 Termination costs consist of involuntary employee termination benefits and severance pursuant to a nonrecurring benefit arrangement recognized as part of a restructuring initiative. Other costs consist of non-termination type costs, including lease termination costs and incremental costs to consolidate or close facilities and relocate employees. Product Recall In Fiscal 2017 there were no product recalls. In Fiscal 2016 and Fiscal 2015 , $0.2 million and $3.4 million , respectively, was reversed due to customer return rates for products recalled in Fiscal 2014 being lower than estimated despite the efforts by the Company to contact impacted customers. These reversals were recorded in Other operating income (expense), net. Income Taxes Deferred income tax assets and liabilities are based on the estimated future tax effects of differences between the financial and tax basis of assets and liabilities based on currently enacted tax laws. The tax balances and income tax expense recognized are based on management's interpretation of the tax laws of multiple jurisdictions. Income tax expense also reflects best estimates and assumptions regarding, among other things, the level of future taxable income and tax planning. Future changes in tax laws, changes in projected levels of taxable income, tax planning and adoption and implementation of new accounting standards could impact the effective tax rate and tax balances recorded. Tax positions are recognized when they are more likely than not to be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is more likely than not to be realized upon settlement. The Company is subject to periodic audits by the United States Internal Revenue Service and other state and local taxing authorities. These audits may challenge certain of the Company's tax positions such as the timing and amount of income and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. These tax uncertainties are reviewed as facts and circumstances change and are adjusted accordingly. This requires significant management judgment in estimating final outcomes. Interest and penalties are classified as Income tax expense in the Consolidated Statements of Operations. See Note 9 , Income Taxes , for further details. The Company performed an evaluation over its deferred tax assets and determined that a valuation allowance is considered necessary. See Note 9 , Income Taxes , for further details on the valuation allowance. Excluding the $173.0 million and $98.3 million non-cash impairment charges to the indefinite-lived intangible asset in Fiscal 2016 and Fiscal 2015, respectively, the Company would not be in a cumulative loss position. Lands' End and Sears Holdings Corporation entered into the Tax Sharing Agreement in connection with the Separation which governs Sears Holdings Corporation's and Lands' End's respective rights, responsibilities and obligations after the Separation with respect to liabilities for United States federal, state, local and foreign taxes attributable to the Lands' End business. In addition to the allocation of tax liabilities, the Tax Sharing Agreement addresses the preparation and filing of tax returns for such taxes and dispute resolution with taxing authorities regarding such taxes. Generally, Sears Holdings Corporation is liable for all pre-Separation United States federal, state and local income taxes. Lands' End generally is liable for all other taxes attributable to its business, including all foreign income taxes. Self-Insurance The Company has a self-insured plan for health and welfare benefits and provides an accrual to cover the obligation. The accrual for the self-insured liability is based on claims filed and an estimate of claims incurred but not yet reported. The Company considers a number of factors, including historical claims information, when determining the amount of the accrual. Costs related to the administration of the plan and related claims are expensed as incurred. Total expenses were $16.5 million , $18.2 million and $16.2 million for Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , respectively. The Company also has a self-insured plan for certain costs related to workers' compensation. The Company obtains third-party insurance coverage to limit exposure to this self-insured risk. Postretirement Benefit Plan Effective January 1, 2006, the Company decided to indefinitely suspend eligibility to the postretirement medical plan for future company retirees. The Company has a 401(k) retirement plan, which covers most regular employees and allows them to make contributions. The Company also provides a matching contribution on a portion of the employee contributions. Total expense incurred under this plan was $3.2 million , $3.3 million and $3.3 million for Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , respectively. Other Comprehensive Income (Loss) Other comprehensive income (loss) encompasses all changes in equity other than those arising from transactions with stockholders, and is comprised solely of foreign currency translation adjustments, impact of the Tax Act on the translation adjustments and net income (loss). (in thousands) Fiscal 2017 Fiscal 2016 Fiscal 2015 Beginning balance: Accumulated other comprehensive loss (net of tax of $6,691, $5,053 and $3,931, respectively) $ (12,426 ) $ (9,384 ) $ (7,298 ) Other comprehensive income (loss) Foreign currency translation adjustments (net of tax of $(1,427), $1,638, and $1,122, respectively) 4,282 (3,042 ) (2,086 ) Impact of Tax Act (2,448 ) — — Ending balance: Accumulated other comprehensive loss (net of tax of $2,816, $6,691, and $5,053 respectively) $ (10,592 ) $ (12,426 ) $ (9,384 ) As a result of the Tax Act, in Fiscal 2017, $2.4 million was reclassified out of Accumulated other comprehensive loss into Accumulated deficit in accordance with the adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income . See New Accounting Pronouncements for further discussion. No other amounts were reclassified out of Accumulated other comprehensive loss in the periods presented. Stock-Based Compensation Stock-based compensation expense for restricted stock units is determined based on the grant date fair value. The fair value is determined based on the Company's stock price on the date of the grant. The Company recognizes stock-based compensation cost net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates. The Company estimates the forfeiture rate based on historical data as well as expected future behavior. Stock-based compensation is recorded in Selling and administrative expense in the Consolidated Statements of Operations over the period in which the employee is required to provide service in exchange for the restricted stock units. Earnings per Share The numerator for both basic and diluted EPS is net income attributable to Lands' End. The denominator for basic EPS is based upon the number of weighted average shares of Lands' End common stock outstanding during the reporting periods. The denominator for diluted EPS is based upon the number of weighted average shares of Lands' End common stock and common stock equivalents outstanding during the reporting periods using the treasury stock method in accordance with ASC 718, Compensation - Stock Compensation . The following table summarizes the components of basic and diluted EPS: (in thousands, except per share amounts) Fiscal 2017 Fiscal 2016 Fiscal 2015 Net income (loss) $ 28,195 $ (109,782 ) $ (19,548 ) Basic weighted average shares outstanding 32,076 32,021 31,979 Dilutive effect of stock awards 34 — — Diluted weighted average shares outstanding 32,110 32,021 31,979 Basic earnings (loss) per share $ 0.88 $ (3.43 ) $ (0.61 ) Diluted earnings (loss) per share $ 0.88 $ (3.43 ) $ (0.61 ) Stock awards are considered anti-dilutive based on the application of the treasury stock method or in the event of a net loss. There were 397,669 , 163,633 and 41,994 anti-dilutive shares excluded from the diluted weighted average shares outstanding in Fiscal 2017 , Fiscal 2016 and Fiscal 2015 , respectively. New Accounting Pronouncements Intangibles - Goodwill and Other In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other , which simplifies the test for goodwill impairment by removing the second step of the goodwill impairment test. Under the new guidance, a one-step quantitative test is conducted. The excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit, is recorded as the amount of goodwill impairment. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This guidance was adopted by the Company during Fourth Quarter 2017 and did not have a material impact on the Company. See Note 2 , Summary of Significant Account Policies - Goodwill and Indefinite-lived Intangible Asset Impairment Assessment s, and Note 8 , Goodwill and Indefinite-Lived Intangible Asset , for additional details on the methodology used for the annual impairment testing. Income Statement - Reporting Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income , in response to the Tax Cuts and Jobs Act enacted on December 22, 2017 by the U.S. federal government. The standard eliminates the stranded tax effects resulting from the Tax Cuts and Jobs Act by reclassifying the effect out of Accumulated other comprehensive loss and into Accumulated deficit. This guidance was adopted by the Company during Fourth Quarter 2017 and resulted in a $2.4 million reclassification on the Consolidated Balance Sheets from Accumulated other comprehensive loss to Accumulated deficit in the period the standard was adopted. See Note 2 , Summary of Significant Account Policies - Accumulated Other Comprehensive Income (Loss) , and Note 9 , Income Taxes , for additional details. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today's guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. This guidance was deferred by ASU 2015-14, Revenue from Contracts with Customers , issued by the FASB in August 2015, and will be effective for Lands' End in the first quarter of its fiscal year ending February 1, 2019. Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. The Company has evaluated its revenue streams to determine whether each revenue stream would be impacted by the provisions of the new guidance, including differences in timing, measurement or presentation. The Company plans to adopt the new guidance using the modified retrospective approach, where policies are implemented on a propsective basis, with the accumulated historical impact recorded as an adjustment to Accumulated deficit in the period of implementation. While most revenue recognition policies are not expected to change, the Company has identified anticipated changes to our Consolidated Statement of Operations related to the timing of revenue recognition for gift card breakage where estimated breakage revenue will now be recognized over the breakage period as opposed to at the end. See Revenue of Breakage for Certain Prepaid Stored-Value Products below for further details. The Company has also identified a presentational change within its Consolidated Balance Sheets, where the reserve for returns will now be presented gross in Inventories, net and Other accrued liabilities. The impact of this presentational change is an increase to both accounts which i |
