Basis of Presentation

3 Months Ended

Apr. 01, 2012

Basis of Presentation [Abstract]

Basis of Presentation

1.  Basis of Presentation

Interim Condensed Consolidated Financial Statements

The unaudited consolidated financial statements of Lakes Entertainment, Inc., a Minnesota corporation, and Subsidiaries (individually and collectively “Lakes” or the “Company”), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. Accordingly, certain information normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States has been condensed and/or omitted. For further information, please refer to the annual audited consolidated financial statements of the Company, and the related notes included within the Company’s Annual Report on Form 10-K, for the year ended January 1, 2012, previously filed with the SEC, from which the balance sheet information as of that date is derived. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting of normal recurring adjustments). The results for the current interim period are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Lakes and its subsidiaries. In addition, as discussed in note 4, Investment in Evitts Resort, LLC, the financial position of Evitts Resort, LLC is consolidated in the Company’s consolidated balance sheet as of April 1, 2012 and January 1, 2012, and its results of operations for the three months ended April 1, 2012 are included in the Company’s consolidated statements of earnings and cash flows. The Company’s consolidated total assets related to Evitts Resort, LLC were $2.1 million and $2.3 million as of April 1, 2012 and January 1, 2012, respectively.

All material intercompany accounts and transactions have been eliminated in consolidation.

Investments in unconsolidated investees, which are less than 20% owned and the Company does not have the ability to significantly influence the operating or financial decisions of the entity, are accounted for under the cost method. See note 7, Investment in Unconsolidated Investee.