Summary Of Significant Accounting Policies	12 Months Ended
Dec. 31, 2011
Summary Of Significant Accounting Policies [Abstract]
Summary Of Significant Accounting Policies	NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business: Office Depot, Inc. ("Office Depot") is a global supplier of office products and services under the Office Depot® brand and other proprietary brand names. As of December 31, 2011, we sold to customers throughout North America, Europe, Asia and Latin America. We operate wholly-owned entities, majority-owned entities or participate in other ventures and alliances. Basis of Presentation: The consolidated financial statements of Office Depot and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany transactions have been eliminated in consolidation. In addition to wholly owned subsidiaries, we consolidate entities where we control financial and operating policies but do not have total ownership. Noncontrolling interests are presented in the Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity as a component of total stockholders' equity and in the Consolidated Statements of Operations as a specific allocation of net earnings (loss). The equity method of accounting is used for our investments in which we do not control but we either share control equally or have significant influence. During 2010, we amended the shareholders' agreement related to our venture in India such that control is now shared equally. The venture was deconsolidated and subsequently accounted for under the equity method. The remaining investment at year end 2011 and 2010 in this venture is considered immaterial. We also participate in a joint venture selling office products and services in Mexico and Central and South America that is accounted for using the equity method with its results presented in miscellaneous income, net in the Consolidated Statements of Operations. Our investment at year end 2011 and 2010 of $196.9 million and $205.8 million, respectively, is included in other assets in the Consolidated Balance Sheets. We received dividends of $25 million in 2011 and $14 million in 2009 from this joint venture. Certain prior year amounts in the income tax rate reconciliation included in Note F – Income Taxes have been recast to provide additional components reported in the current year presentation. Similarly, certain prior year amounts in the reconciliation of Division operating profit to Income (loss) before taxes in Note O – Segment Information have been recast to conform to the current year presentation. Fiscal Year: Fiscal years are based on a 52- or 53-week period ending on the last Saturday in December. Our fiscal 2011 financial statements consisted of 53 weeks, with the additional week occurring in our fourth quarter; all other periods presented in our consolidated financial statements consisted of 52 weeks. Estimates and Assumptions: Preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in the financial statements and related notes. For example, estimates are required for, but not limited to, facility closure costs, asset impairments, fair value measurements, amounts earned under vendor programs, inventory valuation, contingencies and valuation allowances on deferred tax assets. Actual results may differ from those estimates. Foreign Currency: Assets and liabilities of international operations are translated into U.S. dollars using the exchange rate at the balance sheet date. Revenues, expenses and cash flows are translated at average monthly exchange rates. Translation adjustments resulting from this process are recorded in stockholders' equity as a component of accumulated other comprehensive income ("OCI"). Monetary assets and liabilities denominated in a currency other than a consolidated entity's functional currency result in transaction gains or losses from the remeasurement at spot rates at the end of the period. Foreign currency gains and losses are recorded in miscellaneous income, net in the Consolidated Statements of Operations. Cash Equivalents: All short-term highly liquid investments with maturities of three months or less from the date of acquisition are classified as cash equivalents. Amounts in transit from banks for customer credit card and debit card transactions that process in less than seven days are classified as cash. The banks process the majority of these amounts within one to two business days. Approximately $9 million and $53 million of restricted cash held on deposit was included in other current assets at December 31, 2011 and December 25, 2010, respectively. The 2011 amount relates to an advance received that was placed in escrow and ultimately settled in January 2012. Approximately $47 million of restricted cash at the end of the year 2010 relates to the acquisition of Svanströms Gruppen (Frans Svanströms & Co AB) which was initiated in 2010 and completed in the first quarter of 2011. Cash Management: Our cash management process generally utilizes zero balance accounts which provide for the settlement of the related disbursement accounts and cash concentration on a daily basis. Accounts payable and accrued expenses as of December 31, 2011 and December 25, 2010 included $50 million and $64 million, respectively, of amounts not yet presented for payment drawn in excess of disbursement account book balances, after considering existing offset provisions. We may borrow during the period, which may result in higher levels of borrowings and invested cash within the period. At the end of the period, cash may be used to minimize borrowings outstanding at the balance sheet date.Approximately $174 million of our cash and cash equivalents was held outside the U.S. at December 31, 2011. Receivables: Trade receivables, net, totaled $631.7 million and $687.4 million at December 31, 2011 and December 25, 2010, respectively. An allowance for doubtful accounts has been recorded to reduce receivables to an amount expected to be collectible from customers. The allowance recorded at December 31, 2011 and December 25, 2010 was $19.7 million and $28.0 million, respectively. Our exposure to credit risk associated with trade receivables is limited by having a large customer base that extends across many different industries and geographic regions. However, receivables may be adversely affected by an economic slowdown in the U.S. or internationally. No single customer accounted for more than 10% of our total sales in 2011, 2010 or 2009. Other receivables are $231.1 million and $276.4 million as of December 31, 2011 and December 25, 2010, respectively, of which $181.6 million and $198.3 million are amounts due from vendors under purchase rebate, cooperative advertising and various other marketing programs. Inventories: Inventories are stated at the lower of cost or market value and are reduced for inventory losses based on physical counts. In-bound freight is included as a cost of inventories. Also, certain vendor allowances that are related to inventory purchases are considered to reduce the product cost. The weighted average method is used to determine the cost of our inventory in North America and the first-in-first-out method is used for inventory held within our international operations. Income Taxes: Income tax expense is recognized at applicable U.S. or international tax rates. Certain revenue and expense items may be recognized in one period for financial statement purposes and in a different period's income tax return. The tax effects of such differences are reported as deferred income taxes. Valuation allowances are recorded for periods in which realization of deferred tax assets does not meet a more likely than not standard. See Note F for additional information on deferred income taxes. Property and Equipment: Property and equipment additions are recorded at cost. Depreciation and amortization is recognized over their estimated useful lives using the straight-line method. The useful lives of depreciable assets are estimated to be 15 - 30 years for buildings and 3 - 10 years for furniture, fixtures and equipment. Computer software is amortized over three years for common office applications, five years for larger business applications and seven years for certain enterprise-wide systems. Leasehold improvements are amortized over the shorter of the estimated economic lives of the improvements or the terms of the underlying leases, including renewal options considered reasonably assured at inception of the leases. Goodwill and Other Intangible Assets: Goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired. We test for possible goodwill impairment annually in the fourth quarter, or sooner if indications of possible impairment are identified. We use a discounted cash flow analysis that requires that certain assumptions and estimates be made regarding industry economic factors and future profitability. Unless conditions warrant earlier action, intangible assets with indefinite lives also are tested annually for impairment during the fourth quarter using a discounted cash flow approach. We amortize the cost of other intangible assets over their estimated useful lives. Amortizable intangible assets are reviewed at least annually to determine whether events and circumstances warrant a revision to the remaining period of amortization. Impairment of Long-Lived Assets: Long-lived assets with identifiable cash flows are reviewed for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Impairment is assessed at the individual store level which is the lowest level of identifiable cash flows, and considers the estimated undiscounted cash flows over the asset's remaining life. If estimated undiscounted cash flows are insufficient to recover the investment, an impairment loss is recognized equal to the estimated fair value of the asset less its carrying value and any costs of disposition. The fair value estimate is generally the discounted amount of estimated store-specific cash flows. Impairment losses of $11.4 million, $2.3 million and $3.5 million were recognized in 2011, 2010 and 2009, respectively, relating to certain under-performing retail stores. Facility Closure Costs: We regularly review store performance against expectations and close stores not meeting our performance requirements. Costs associated with store or other facility closures, principally accrued lease costs, are recognized when the facility is no longer used in an operating capacity or when a liability has been incurred. Store assets are also reviewed for possible impairment, or reduction of estimated useful lives. Accruals for facility closure costs are based on the future commitments under contracts, adjusted for assumed sublease benefits and discounted at the company's risk-adjusted rate at the time of closing. We recorded charges relating to facilities closed totaling $9 million, $5 million and $126 million in 2011, 2010 and 2009, respectively. Additionally, we recognize charges to terminate existing commitments and to adjust remaining commitments to current market values. The accrued balance relating to our future commitments under operating leases for all of our closed facilities, including those in Note B, was $106 million and $133 million at December 31, 2011 and December 25, 2010, respectively. The short-term and long-term components of this liability are included in accrued expenses and other long-term liabilities, respectively, on the Consolidated Balance Sheets. Accrued Expenses: Included in accrued expenses and other current liabilities in our Consolidated Balance Sheets are accrued payroll-related amounts of approximately $262 million and $273 million at December 31, 2011 and December 25, 2010, respectively. Fair Value of Financial Instruments: The estimated fair values of financial instruments recognized in the Consolidated Balance Sheets or disclosed within these Notes to Consolidated Financial Statements have been determined using available market information, information from unrelated third-party financial institutions and appropriate valuation methodologies, primarily discounted projected cash flows. However, considerable judgment is required when interpreting market information and other data to develop estimates of fair value. See Note I for additional information on fair value. Revenue Recognition: Revenue is recognized at the point of sale for retail transactions and at the time of successful delivery for contract, catalog and internet sales. Sales taxes collected are not included in reported sales. We use judgment in estimating sales returns, considering numerous factors including historical sales return rates. Although we consider our sales return accruals to be adequate and proper, changes from historical customer patterns could require adjustments to the provision for returns. We also record reductions to our revenues for customer programs and incentive offerings including special pricing agreements, certain promotions and other volume-based incentives. Revenue from sales of extended warranty service plans is either recognized at the point of sale or over the warranty period, depending on the determination of legal obligor status. All performance obligations and risk of loss associated with such contracts are transferred to an unrelated third-party administrator at the time the contracts are sold. Costs associated with these contracts are recognized in the same period as the related revenue. We recognize a liability for future performance when gift cards are sold and recognize the related revenue when gift cards are redeemed as payment for our products. We recognize as revenue the unused portion of the gift card liability when historical data indicates that additional redemption is remote. Franchise fees, royalty income and the sales of products to our franchisees and licensees are included in sales, while product costs are included in cost of goods sold and occupancy costs in the Consolidated Statements of Operations. Cost of goods sold and occupancy: We include in cost of goods sold and occupancy costs, inventory costs, net of estimable vendor allowances and rebates, cash discounts on purchased inventory, freight costs incurred to bring merchandise to stores and warehouses, provisions for inventory value and physical adjustments and occupancy costs, including depreciation or facility rent of inventory-holding and selling locations and related utilities. Shipping and Handling Fees and Costs: Income generated from shipping and handling fees is classified as revenues for all periods presented. Freight costs incurred to ship merchandise to customers are recorded as a component of store and warehouse operating and selling expenses. Shipping costs, combined with warehouse handling costs, totaled $727.0 million in 2011, $747.1 million in 2010 and $767.6 million in 2009.Other companies may present shipping and handling costs in cost of goods sold. Accordingly, our presentation of cost of goods sold and gross profit may not be comparable to similarly titled captions used by other companies. Store and warehouse operating and selling expenses: This caption includes employee payroll and benefits and other operating costs incurred relating to selling activities, as well as warehouse activities, such as those relating to picking, packing and outbound delivery. We also include advertising expenses, accretion relating to closed facilities, and asset impairments of assets used in operations. General and administrative expenses: General and administrative expenses include, employee payroll and benefits, as well as other expenses for executive management and various staff functions, such as information technology, most human resources functions, finance, legal, internal audit, and certain merchandising and product development functions. Gains, losses and impairment charges relating to assets used to support these functions, as well as certain charges related to company-directed activities are included in this caption. General and administrative expenses are allocated to our segments in determination of Division operating profit to the extent those costs are considered to be directly or closely related to segment activity. Advertising: Advertising costs are charged either to expense when incurred or, in the case of direct marketing advertising, capitalized and amortized in proportion to the related revenues over the estimated life of the material, which range from several months to up to one year. Advertising expense recognized was $434.6 million in 2011, $469.5 million in 2010 and $453.3 million in 2009. Prepaid advertising costs were $28.3 million as of December 31, 2011 and $40.9 million as of December 25, 2010. Accounting for Stock-Based Compensation: We account for stock-based compensation using the fair value method of expense recognition. We use the Black-Scholes valuation model and recognize compensation expense on a straight-line basis over the requisite service period of the grant. We consider alternative models if grants have characteristics that cannot be reasonably estimated using this model. Pre-opening Expenses: Pre-opening expenses related to opening new stores and warehouses or relocating existing stores and warehouses are expensed as incurred and included in store and warehouse operating and selling expenses. Self-Insurance: Office Depot is primarily self-insured for workers' compensation, auto and general liability and employee medical insurance programs. Self-insurance liabilities are based on claims filed and estimates of claims incurred but not reported. These liabilities are not discounted. Comprehensive Income (Loss): Comprehensive income (loss) represents the change in stockholders' equity from transactions and other events and circumstances arising from non-stockholder sources. Comprehensive income consists of net earnings (loss), foreign currency translation adjustments, deferred pension gains (losses), and elements of qualifying cash flow hedges, net of applicable income taxes. As of December 31, 2011, and December 25, 2010, our Consolidated Balance Sheet reflected accumulated OCI in the amount of $195 million and $224 million, which consisted of $193 million and $214 million in foreign currency translation adjustments, $3 million and $4 million in unamortized gain on hedge and $1 million in deferred pension loss and $6 million in deferred pension gain, respectively. Vendor Arrangements: We enter into arrangements with substantially all of our significant vendors that provide for some form of consideration to be received from the vendors. Arrangements vary, but some specify volume rebate thresholds, advertising support levels, as well as terms for payment and other administrative matters. The volume-based rebates, supported by a vendor agreement, are estimated throughout the year and reduce the cost of inventory and cost of goods sold during the year. This estimate is regularly monitored and adjusted for current or anticipated changes in purchase levels and for sales activity. Other promotional consideration received is event-based or represents general support and is recognized as a reduction of cost of goods sold or inventory, as appropriate based on the type of promotion and the agreement with the vendor. Some arrangements may meet the specific, incremental, identifiable criteria that allow for direct operating expense offset, but such arrangements are not significant. New Accounting Standards: Effective for the first quarter of 2012, a new accounting standard will require the presentation of net income and other comprehensive income either as a continuous statement or as two separate statements. The portion of the new standard which would require the presentation of reclassifications of other comprehensive income on the face of the income statement has been deferred. In past periods, we have presented the components of other comprehensive income as a separate statement for the full year and as a separate footnote for interim periods. We anticipate following the two statement format. The standard will not change the recognition or measurement of net income or other comprehensive income. Also effective for the first quarter of 2012, a new accounting standard has been issued that is intended to achieve common fair value measurements and disclosure requirements between U.S. generally accepted accounting principles and International Financial Reporting Standards. This new standard amends current fair value guidance to include increased transparency around valuation inputs and investment categorization. Effective for 2012 testing for goodwill impairment, entities will have an option of performing a qualitative assessment before calculating the fair value of their reporting units. If, based on the qualitative assessment, an entity concludes it is more likely than not that the fair value of the reporting unit exceeds its carrying value, quantitative testing for impairment is not necessary. The company did not elect the early adoption that was available for 2011. Additionally, effective for the first quarter of 2014, a new accounting standard will require disclosure of information about the effect or potential effect of financial instrument netting arrangements on the company's financial position. Companies will be required to present both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. Including the above, there are no recently issued accounting standards that are expected to have a material effect on our financial condition, results of operations or cash flows.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business: Office Depot, Inc. ("Office Depot") is a global supplier of office products and services under the Office Depot® brand and other proprietary brand names. As of December 31, 2011, we sold to customers throughout North America, Europe, Asia and Latin America. We operate wholly-owned entities, majority-owned entities or participate in other ventures and alliances.

Basis of Presentation: The consolidated financial statements of Office Depot and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany transactions have been eliminated in consolidation. In addition to wholly owned subsidiaries, we consolidate entities where we control financial and operating policies but do not have total ownership. Noncontrolling interests are presented in the Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity as a component of total stockholders' equity and in the Consolidated Statements of Operations as a specific allocation of net earnings (loss). The equity method of accounting is used for our investments in which we do not control but we either share control equally or have significant influence. During 2010, we amended the shareholders' agreement related to our venture in India such that control is now shared equally. The venture was deconsolidated and subsequently accounted for under the equity method. The remaining investment at year end 2011 and 2010 in this venture is considered immaterial. We also participate in a joint venture selling office products and services in Mexico and Central and South America that is accounted for using the equity method with its results presented in miscellaneous income, net in the Consolidated Statements of Operations. Our investment at year end 2011 and 2010 of $196.9 million and $205.8 million, respectively, is included in other assets in the Consolidated Balance Sheets. We received dividends of $25 million in 2011 and $14 million in 2009 from this joint venture.

Certain prior year amounts in the income tax rate reconciliation included in Note F – Income Taxes have been recast to provide additional components reported in the current year presentation. Similarly, certain prior year amounts in the reconciliation of Division operating profit to Income (loss) before taxes in Note O – Segment Information have been recast to conform to the current year presentation.

Fiscal Year: Fiscal years are based on a 52- or 53-week period ending on the last Saturday in December. Our fiscal 2011 financial statements consisted of 53 weeks, with the additional week occurring in our fourth quarter; all other periods presented in our consolidated financial statements consisted of 52 weeks.

Estimates and Assumptions: Preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in the financial statements and related notes. For example, estimates are required for, but not limited to, facility closure costs, asset impairments, fair value measurements, amounts earned under vendor programs, inventory valuation, contingencies and valuation allowances on deferred tax assets. Actual results may differ from those estimates.

Foreign Currency: Assets and liabilities of international operations are translated into U.S. dollars using the exchange rate at the balance sheet date. Revenues, expenses and cash flows are translated at average monthly exchange rates. Translation adjustments resulting from this process are recorded in stockholders' equity as a component of accumulated other comprehensive income ("OCI").

Monetary assets and liabilities denominated in a currency other than a consolidated entity's functional currency result in transaction gains or losses from the remeasurement at spot rates at the end of the period. Foreign currency gains and losses are recorded in miscellaneous income, net in the Consolidated Statements of Operations.

Cash Equivalents: All short-term highly liquid investments with maturities of three months or less from the date of acquisition are classified as cash equivalents. Amounts in transit from banks for customer credit card and debit card transactions that process in less than seven days are classified as cash. The banks process the majority of these amounts within one to two business days. Approximately $9 million and $53 million of restricted cash held on deposit was included in other current assets at December 31, 2011 and December 25, 2010, respectively. The 2011 amount relates to an advance received that was placed in escrow and ultimately settled in January 2012. Approximately $47 million of restricted cash at the end of the year 2010 relates to the acquisition of Svanströms Gruppen (Frans Svanströms & Co AB) which was initiated in 2010 and completed in the first quarter of 2011.

Cash Management: Our cash management process generally utilizes zero balance accounts which provide for the settlement of the related disbursement accounts and cash concentration on a daily basis. Accounts payable and accrued expenses as of December 31, 2011 and December 25, 2010 included $50 million and $64 million, respectively, of amounts not yet presented for payment drawn in excess of disbursement account book balances, after considering existing offset provisions. We may borrow during the period, which may result in higher levels of borrowings and invested cash within the period. At the end of the period, cash may be used to minimize borrowings outstanding at the balance sheet date.Approximately $174 million of our cash and cash equivalents was held outside the U.S. at December 31, 2011.

Receivables: Trade receivables, net, totaled $631.7 million and $687.4 million at December 31, 2011 and December 25, 2010, respectively. An allowance for doubtful accounts has been recorded to reduce receivables to an amount expected to be collectible from customers. The allowance recorded at December 31, 2011 and December 25, 2010 was $19.7 million and $28.0 million, respectively.

Our exposure to credit risk associated with trade receivables is limited by having a large customer base that extends across many different industries and geographic regions. However, receivables may be adversely affected by an economic slowdown in the U.S. or internationally. No single customer accounted for more than 10% of our total sales in 2011, 2010 or 2009.

Other receivables are $231.1 million and $276.4 million as of December 31, 2011 and December 25, 2010, respectively, of which $181.6 million and $198.3 million are amounts due from vendors under purchase rebate, cooperative advertising and various other marketing programs.

Inventories: Inventories are stated at the lower of cost or market value and are reduced for inventory losses based on physical counts. In-bound freight is included as a cost of inventories. Also, certain vendor allowances that are related to inventory purchases are considered to reduce the product cost. The weighted average method is used to determine the cost of our inventory in North America and the first-in-first-out method is used for inventory held within our international operations.

Income Taxes: Income tax expense is recognized at applicable U.S. or international tax rates. Certain revenue and expense items may be recognized in one period for financial statement purposes and in a different period's income tax return. The tax effects of such differences are reported as deferred income taxes. Valuation allowances are recorded for periods in which realization of deferred tax assets does not meet a more likely than not standard. See Note F for additional information on deferred income taxes.

Property and Equipment: Property and equipment additions are recorded at cost. Depreciation and amortization is recognized over their estimated useful lives using the straight-line method. The useful lives of depreciable assets are estimated to be 15 - 30 years for buildings and 3 - 10 years for furniture, fixtures and equipment. Computer software is amortized over three years for common office applications, five years for larger business applications and seven years for certain enterprise-wide systems. Leasehold improvements are amortized over the shorter of the estimated economic lives of the improvements or the terms of the underlying leases, including renewal options considered reasonably assured at inception of the leases.

Goodwill and Other Intangible Assets: Goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired. We test for possible goodwill impairment annually in the fourth quarter, or sooner if indications of possible impairment are identified. We use a discounted cash flow analysis that requires that certain assumptions and estimates be made regarding industry economic factors and future profitability.

Unless conditions warrant earlier action, intangible assets with indefinite lives also are tested annually for impairment during the fourth quarter using a discounted cash flow approach.

We amortize the cost of other intangible assets over their estimated useful lives. Amortizable intangible assets are reviewed at least annually to determine whether events and circumstances warrant a revision to the remaining period of amortization.

Impairment of Long-Lived Assets: Long-lived assets with identifiable cash flows are reviewed for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Impairment is assessed at the individual store level which is the lowest level of identifiable cash flows, and considers the estimated undiscounted cash flows over the asset's remaining life. If estimated undiscounted cash flows are insufficient to recover the investment, an impairment loss is recognized equal to the estimated fair value of the asset less its carrying value and any costs of disposition. The fair value estimate is generally the discounted amount of estimated store-specific cash flows. Impairment losses of $11.4 million, $2.3 million and $3.5 million were recognized in 2011, 2010 and 2009, respectively, relating to certain under-performing retail stores.

Facility Closure Costs: We regularly review store performance against expectations and close stores not meeting our performance requirements. Costs associated with store or other facility closures, principally accrued lease costs, are recognized when the facility is no longer used in an operating capacity or when a liability has been incurred. Store assets are also reviewed for possible impairment, or reduction of estimated useful lives.

Accruals for facility closure costs are based on the future commitments under contracts, adjusted for assumed sublease benefits and discounted at the company's risk-adjusted rate at the time of closing. We recorded charges relating to facilities closed totaling $9 million, $5 million and $126 million in 2011, 2010 and 2009, respectively. Additionally, we recognize charges to terminate existing commitments and to adjust remaining commitments to current market values. The accrued balance relating to our future commitments under operating leases for all of our closed facilities, including those in Note B, was $106 million and $133 million at December 31, 2011 and December 25, 2010, respectively. The short-term and long-term components of this liability are included in accrued expenses and other long-term liabilities, respectively, on the Consolidated Balance Sheets.

Accrued Expenses: Included in accrued expenses and other current liabilities in our Consolidated Balance Sheets are accrued payroll-related amounts of approximately $262 million and $273 million at December 31, 2011 and December 25, 2010, respectively.

Fair Value of Financial Instruments: The estimated fair values of financial instruments recognized in the Consolidated Balance Sheets or disclosed within these Notes to Consolidated Financial Statements have been determined using available market information, information from unrelated third-party financial institutions and appropriate valuation methodologies, primarily discounted projected cash flows. However, considerable judgment is required when interpreting market information and other data to develop estimates of fair value. See Note I for additional information on fair value.

Revenue Recognition: Revenue is recognized at the point of sale for retail transactions and at the time of successful delivery for contract, catalog and internet sales. Sales taxes collected are not included in reported sales. We use judgment in estimating sales returns, considering numerous factors including historical sales return rates. Although we consider our sales return accruals to be adequate and proper, changes from historical customer patterns could require adjustments to the provision for returns. We also record reductions to our revenues for customer programs and incentive offerings including special pricing agreements, certain promotions and other volume-based incentives. Revenue from sales of extended warranty service plans is either recognized at the point of sale or over the warranty period, depending on the determination of legal obligor status. All performance obligations and risk of loss associated with such contracts are transferred to an unrelated third-party administrator at the time the contracts are sold. Costs associated with these contracts are recognized in the same period as the related revenue.

We recognize a liability for future performance when gift cards are sold and recognize the related revenue when gift cards are redeemed as payment for our products. We recognize as revenue the unused portion of the gift card liability when historical data indicates that additional redemption is remote.

Franchise fees, royalty income and the sales of products to our franchisees and licensees are included in sales, while product costs are included in cost of goods sold and occupancy costs in the Consolidated Statements of Operations.

Cost of goods sold and occupancy: We include in cost of goods sold and occupancy costs, inventory costs, net of estimable vendor allowances and rebates, cash discounts on purchased inventory, freight costs incurred to bring merchandise to stores and warehouses, provisions for inventory value and physical adjustments and occupancy costs, including depreciation or facility rent of inventory-holding and selling locations and related utilities.

Shipping and Handling Fees and Costs: Income generated from shipping and handling fees is classified as revenues for all periods presented. Freight costs incurred to ship merchandise to customers are recorded as a component of store and warehouse operating and selling expenses. Shipping costs, combined with warehouse handling costs, totaled $727.0 million in 2011, $747.1 million in 2010 and $767.6 million in 2009.Other companies may present shipping and handling costs in cost of goods sold. Accordingly, our presentation of cost of goods sold and gross profit may not be comparable to similarly titled captions used by other companies.

Store and warehouse operating and selling expenses: This caption includes employee payroll and benefits and other operating costs incurred relating to selling activities, as well as warehouse activities, such as those relating to picking, packing and outbound delivery. We also include advertising expenses, accretion relating to closed facilities, and asset impairments of assets used in operations.

General and administrative expenses: General and administrative expenses include, employee payroll and benefits, as well as other expenses for executive management and various staff functions, such as information technology, most human resources functions, finance, legal, internal audit, and certain merchandising and product development functions. Gains, losses and impairment charges relating to assets used to support these functions, as well as certain charges related to company-directed activities are included in this caption. General and administrative expenses are allocated to our segments in determination of Division operating profit to the extent those costs are considered to be directly or closely related to segment activity.

Advertising: Advertising costs are charged either to expense when incurred or, in the case of direct marketing advertising, capitalized and amortized in proportion to the related revenues over the estimated life of the material, which range from several months to up to one year.

Advertising expense recognized was $434.6 million in 2011, $469.5 million in 2010 and $453.3 million in 2009. Prepaid advertising costs were $28.3 million as of December 31, 2011 and $40.9 million as of December 25, 2010.

Accounting for Stock-Based Compensation: We account for stock-based compensation using the fair value method of expense recognition. We use the Black-Scholes valuation model and recognize compensation expense on a straight-line basis over the requisite service period of the grant. We consider alternative models if grants have characteristics that cannot be reasonably estimated using this model.

Pre-opening Expenses: Pre-opening expenses related to opening new stores and warehouses or relocating existing stores and warehouses are expensed as incurred and included in store and warehouse operating and selling expenses.

Self-Insurance: Office Depot is primarily self-insured for workers' compensation, auto and general liability and employee medical insurance programs. Self-insurance liabilities are based on claims filed and estimates of claims incurred but not reported. These liabilities are not discounted.

Comprehensive Income (Loss): Comprehensive income (loss) represents the change in stockholders' equity from transactions and other events and circumstances arising from non-stockholder sources. Comprehensive income consists of net earnings (loss), foreign currency translation adjustments, deferred pension gains (losses), and elements of qualifying cash flow hedges, net of applicable income taxes. As of December 31, 2011, and December 25, 2010, our Consolidated Balance Sheet reflected accumulated OCI in the amount of $195 million and $224 million, which consisted of $193 million and $214 million in foreign currency translation adjustments, $3 million and $4 million in unamortized gain on hedge and $1 million in deferred pension loss and $6 million in deferred pension gain, respectively.

Vendor Arrangements: We enter into arrangements with substantially all of our significant vendors that provide for some form of consideration to be received from the vendors. Arrangements vary, but some specify volume rebate thresholds, advertising support levels, as well as terms for payment and other administrative matters. The volume-based rebates, supported by a vendor agreement, are estimated throughout the year and reduce the cost of inventory and cost of goods sold during the year. This estimate is regularly monitored and adjusted for current or anticipated changes in purchase levels and for sales activity. Other promotional consideration received is event-based or represents general support and is recognized as a reduction of cost of goods sold or inventory, as appropriate based on the type of promotion and the agreement with the vendor. Some arrangements may meet the specific, incremental, identifiable criteria that allow for direct operating expense offset, but such arrangements are not significant.

New Accounting Standards: Effective for the first quarter of 2012, a new accounting standard will require the presentation of net income and other comprehensive income either as a continuous statement or as two separate statements. The portion of the new standard which would require the presentation of reclassifications of other comprehensive income on the face of the income statement has been deferred. In past periods, we have presented the components of other comprehensive income as a separate statement for the full year and as a separate footnote for interim periods. We anticipate following the two statement format. The standard will not change the recognition or measurement of net income or other comprehensive income.

Also effective for the first quarter of 2012, a new accounting standard has been issued that is intended to achieve common fair value measurements and disclosure requirements between U.S. generally accepted accounting principles and International Financial Reporting Standards. This new standard amends current fair value guidance to include increased transparency around valuation inputs and investment categorization.

Effective for 2012 testing for goodwill impairment, entities will have an option of performing a qualitative assessment before calculating the fair value of their reporting units. If, based on the qualitative assessment, an entity concludes it is more likely than not that the fair value of the reporting unit exceeds its carrying value, quantitative testing for impairment is not necessary. The company did not elect the early adoption that was available for 2011.

Additionally, effective for the first quarter of 2014, a new accounting standard will require disclosure of information about the effect or potential effect of financial instrument netting arrangements on the company's financial position. Companies will be required to present both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset.

Including the above, there are no recently issued accounting standards that are expected to have a material effect on our financial condition, results of operations or cash flows.