Cloud Computing Hosting Arrangement

6 Months Ended

Jul. 30, 2023

Disclosure Text Block Supplement [Abstract]

Other Assets Disclosure [Text Block]

6.          Cloud Computing Hosting Arrangement

We are in the process of implementing a common Enterprise Resource Planning system (ERP) across all divisions. The ERP went live at Sunset West in December 2022 and in the legacy Hooker divisions in early September 2023. We expect it to go live in the Home Meridian segment during fiscal 2025.

Based on the provisions of ASU 2018-15, Intangibles — Goodwill and Other — Internal-Use Software, we capitalize implementation costs associated with hosting arrangements that are service contracts. In addition, based on the provisions of ASC 835 Interest, we capitalize interest associated with this ERP project by applying the interest rate on our unsecured term loan to the amount of the accumulated expenditures for the ERP asset. Both these costs are recorded on the “Other assets” line of our condensed consolidated balance sheets. Amortization expense commenced when the ERP went live at Sunset West in the fourth quarter of fiscal 2023. Capitalized implementation costs and interest are amortized over ten years on a straight-line basis. The capitalized implementation costs and interest expenses at July 30, 2023 and January 29, 2023 were as follows:

	Capitalized Implementation Costs			Capitalized interest expenses
Balance at January 29, 2023	$	8,598		$	84
Costs capitalized during the period		2,630			160
Accumulated amortization		(37	)		(1	)
Balance at July 30, 2023	$	11,191		$	243