audit

Audit Plan

for

For fiscal year ending January 31, 2015

Team Members:

Adam Kemp

Jorge Araujo

Steven Eldad

ZachWorthen

Erick Verduzco

Table of Contents

Understanding the Client 3 - 5

Company Overview

Company History

Industry

Competitive Conditions

Developments

Corporate Governance

Regulations

Risk Assessment Analytics 6-9

Income Statement

Revenue Details

Gross Profit Details

Balance Sheet

Calculation of Receivables

Risk Assessment 10-15

Significant Risks

· Revenue

· Inventory

· Accounts Receivable

Risks related to business

· Technology

· Litigation

· Goodwill and intangibles

Audit Programs for Significant Accounts 16-18

Revenue

Inventory

Accounts Receivable

Works Cited 19

Company Overview

GameStop Corporation is an American retail chain based in Grapevine, Texas who sells new and pre-owned video games and accessories, electronics, and wireless services. GameStop is the world’s largest video game retailer, and operates approximately 6,690 retail stores across the United States, Australia, Canada, and Europe (GameStop 10-K). GameStop generates about 70% of its sales from U.S. based stores, about 18% from European based stores, and about 12% from its Australian and Canadian locations combined. GameStop divides its reportable segments into three main categories: Video Game Brands, Technology Brands, and E-Commerce, which consists of revenues from its 12 various online retail websites (GameStop 10-K). Since its initial public offering in 2002 on the New York Stock Exchange, GameStop has acquired and developed a variety of subsidiaries, which include EB Games, Game Informer, Cricket Wireless, Micromania, and Kongregate. In addition, GameStop offers both Apple and AT&T resell products through its Simply Mac and Spring Mobile operations respectively (GameStop 10-K). GameStop is registered as a Delaware corporation although based in and operated from Grapevine, Texas.

Company History

GameStop was created by a series of mergers and acquisitions going back to 1984. Babbage’s, a small hardware and software retailer, was the predecessor of what is now GameStop. Babbage’s first merged with Software Etc., which created a new entity called NeoStar Retail Group. In 1996, facing declining sales and executive management employment issues, NeoStar was subsequently purchased by Barnes & Noble in 1999. Barnes & Noble acquired Funco, another video game retailer in 2000, which was then merged with NeoStar. In December 2000, Funco was renamed to GameStop as the company prepared to go public. (GameStop.com Company History). GameStop continued to acquire other video game and technology brands that appeared to be potentially profitable. In 2005, GameStop purchased Electronic Boutique Games, or EB Games, and in 2007 GameStop purchased Rhino Video Games, which was originally owned by Blockbuster. In addition, GameStop acquired Micromania in 2008, Kongegrate in 2010, and BuyMyTronics in 2012. In addition, GameStop launched a division named GameStop Technology Institute, which is dedicated to developing and delivering new and innovative technology products and services to consumers (GameStop.com Company History).Through the acquisition of a variety of related product companies, GameStop has strengthened and diversified its position in the video game retail industry.

Industry

According to market research measurements, the video game industry includes new video game hardware, software, and accessories, and excludes pre-owned video game products in the calculation of the video game market size. According to International Development Group, the global market size for new video game products and PC entertainment software was $21.5 billion in 2014, $13.1 billion of which being in the United States. The average age of a video game player is 31 years old, 78% of which being age 18 or older (GameStop 10-K). In addition, the continually growing digital content market was estimated to be between $8 and $10 billion in 2014, which is not included in the initial calculation for the video game product market. The digital gaming market refers to games and game accessories downloaded on to consoles, computers, smartphones, tablets, and other devices. This industry is key due to the fact that the newest consoles and video game platforms offer full video games for download and other associated downloadable content. In addition, the casual game market is defined as simply, easy to use, low-price video games that are played on web browsers or downloaded onto gaming platforms. Through its Kongegrate subsidiary, GameStop generates revenues from these casual games through advertisement and paid premium downloadable content.

Competitive Conditions

The electronic gaming industry is very competitive and frequently changing. GameStop competes with a variety of entities, such as regional retail chains, consumer electronic stores, video game and PC software specialty stores, direct sales by software publishers, online retail companies, and companies that rent video games for temporary use (GameStop 10-K). Some of the specific and most direct competitors of GameStop are Wal-Mart, Target, Amazon, Best Buy, K-Mart, and others, as many different retailers carry video games and associated products. Aside from specific retail competitors, GameStop competes with other forms of entertainment activities as wholes. Examples of other entertainment activities and industries that may affect GameStop’s business are casual games, mobile games, movies, television, theatre, sporting events, family entertainment centers, and more. Other competitors of interest are Microsoft, Sony, and other console producers, as video games are now available for direct download onto these consoles from the producers.

Developments related to GameStop, the Industry, and the Audit

A core business goal of GameStop is to successfully manage its amount of retail store locations to maximize profitability, and has historically opened 300-400 new stores every year. GameStop believes that by being a destination location, it can offer a variety of products and services that will incentivize game enthusiasts to travel to GameStop store locations and spend time in them. This strategy of continuing to grow its physical presence directly conflicts with the fact that video games are increasingly being downloaded directly from the Internet, without the necessity of traveling to a brick and mortar store to purchase video games. Another specific development, perhaps related to increasing direct downloads, is that GameStop closed all of its 108 stores in Spain in 2014 and completely exited the Spanish market due to lack of profitability in this area. GameStop opened 49 stores and closed 300 stores in 2014 overall, which is a net closing of 251 stores. In addition, GameStop has stated that it plans to open 50 stores and close 200-300 stores in 2015, which is another net closing of roughly 250 stores (GameStop 10-K). Given that GameStop had 6,690 store locations total in 2014, closing 250 a year is relatively significant in terms of reducing its physical store presence. However, GameStop does plan to increase its digital presence. According to its 2014 10-K, GameStop recognizes the fact that the future of growth in the video game industry is going to revolve around video games delivered in digital form and other new variations of gaming. GameStop says that its response to this increasing digital demand is the fact that it currently sells various types of subscription time cards and downloadable content within its stores, but both of these products can be downloaded at home already anyway. A more optimistic strategy GameStop mentions in its 10-K is its continued development and investment in Kongregate, which is its subsidiary that offers free-to-play games where users have the option to purchase in game content and other downloads with virtual currency. With games available in both the Apple and Google application stores, Kongregate has amassed 36 million mobile installs of games and continues to release new titles (GameStop 10-K).

Corporate Governance

GameStop’s Board of Directors include 11 members from a variety of corporate, financial, and other backgrounds. The board is led by Executive Chairman Daniel A. DeMatteo, who has been an executive officer in the video gaming industry since 1988 and served as GameStop’s Chief Operating Officer from 1996 to August 2008. The current Chief Executive Officer of GameStop is J. Paul Raines, who was named GameStop’s Chief Operating Officer in September 2008 prior to becoming Chief Executive Officer in June 2010. Mr. Raines has past experience in management and board positions for Home Depot, L.L. Bean, and Advance Auto Parts (GameStop Board of Directors). GameStop has developed a Code of Ethics, Standards, and Conduct that is applicable to all of its management-level employees, and pledges to properly disclose any amendment’s to this Code to its website at www.gamestop.com (GameStop 10-K).

Regulations

An applicable and relevant regulation that GameStop and the video game retail industry must pay close attention to is the Entertainment Software Rating Board’s (ESRB) age and content ratings of video games. Many of the newest and most popular video games are rated M for Mature, and can only legally be sold to a person over the age of 18, and if a minor is purchasing, an adult must be present to authorize the legality of the purchase. GameStop employees must be thorough in verifying customers’ age before selling them mature games, and be aware of in-store advertisements and demos that could potentially be psychologically damaging to underage customers. GameStop must follow ESRB retail requirements to avoid any potential harm, damages, or lawsuits that might arise from selling Mature video games to underage children (esrb.org).

Analytics

A. Sales increase in 2014 relate primarily to the increase in new video game hardware sales associated with the release of the PlayStation 4 and the Microsoft Xbox One in November 2013, and an increase in sales of Mobile and Consumer Electronics due to acquisition of stores in the technology brands segment. Both revenue increases were partially offset by a decrease in new video game software sales due to a decrease in previous generation console software sales, and a weak lineup of titles released in 2014; see Exhibit A-1 for an Analysis of Revenues. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

B. Increase in COS is due to the increase in Sales discussed in Footnote A. Additionally, sales of new generation consoles and associated accessories carry lower margins than their older generation counter-parts. These increases were partially offset by decreases in COS for pre-owned games, as well as an increase in the growth for the web and mobile gaming platform, Kongregate; see Exhibit A-2 for an analysis of changes in Gross Profit %. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

C. Increase in selling and administrative expenses are due primarily to growth in the Technology Brands segment, which require more selling and administrative expenses as compared to other segments. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

D. The decrease in depreciation and amortization is due primarily to a decrease in the capital expenditures related to the video game brands segment. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

E. The higher Impairment expense in 2013 was due primarily to impairments of 9.5 million for technology assets and intangible assets related to the abandonment of Spawn Labs, as well as 9 million in property impairment. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

A. The Receivables balance increase is due primarily to an increase in activity in the Technology Brands Segment. This amount is partially offset by the balance in Allowance for Doubtful Accounts. The estimate for doubtful accounts does not show any related increase from the previous year (see Exhibit A-3 for a calculation of net receivables). This estimate should be evaluated. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

B. GameStop Corp reports a net decrease of 24.3 M that does not result from impairments. All of the goodwill reductions result from foreign currency translation adjustments for reporting units in Canada, Australia, and Europe. These reductions are partially offset by a small goodwill increase reported through the Technology Brands segment specifically due to the acquisition of AT&T resellers and authorized Apple resellers. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

C. The increase in long-term debt is due to the issuance of $350 million unsecured 5.5% 5-year notes due on October 1, 2019. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

D. The Additional Paid-in-Capital balance was reduced by a common stock repurchase, which was partially offset by a modest payout in stock-based compensation. (GameStop Corp 10K, Notes to Consolidated Financial Statements)

E. The decrease in this account is related in its entirety to a foreign currency translation adjustment decrease of $107.9M (GameStop Corp 10K, Notes to Consolidated Financial Statements)

Risk Assessment

GameStop has a high inherent risk because many incidences of fraud involve overstatement of revenue, inventory, and account receivable. Decline in sales due to economic declines, product obsolescence, increased competition, and technology improvements can result in fraud or overstatement of revenues. Furthermore, GameStop Corp. operates as a multichannel video game retailer. It sells new and pre-owned video game hardware; physical and digital video game software; pre-owned and value video game products; video game accessories, such as controllers and gaming headsets. Thus, technology has a significant impact on the company. For example, PlayStation 2 games will be obsolete once the new PlayStation 3 comes out resulting in loss of profit and obsolete inventory. Competition of different gaming companies and gaming consoles create high risk and uncertainty of how much inventory to carry and when they will become obsolete. In addition, the company sells used games, which creates the need for estimates when valuing those games. At what price should we carry that inventory? How much are they worth? Not knowing the exact answers to these questions can create improper inventory valuations. Another issue that may raise questions would be pre-ordered games. New and upcoming games are pre-ordered by customers. The company may tempt to recognize the revenue at the day of the order. Revenue recognition policies need to be reviewed and followed. The tone at the top need to be explicit regarding that matter. In 2013, GameStop’s financial statement looked horrible because of goodwill loss contingency. Trying to compete and dominate the market, there is a possibility for overstatements for the year of 2014 in order to give a better picture of the financial statement.

We design and perform our risk assessment procedures to obtain an understanding of GameStop and its environment, including its internal controls, and to evaluate the risk of material misstatement in the financial statements. Utilizing analytical procedures, observation, and inspection of GameStop’s financials and its environment. We identified risks and categorized those risks as “other” and “significant risks”.

Other risks: risks that we do not deem significant but feel important enough to document

· The company is affected by changes of technology, and profitability sometimes depends on other firm’s innovations and new products.

· The company is engaged in many acquisitions and is subjected to goodwill and other asset impairments.

· During the course of business, the company might face litigations from external sources.

· Inability to benefit from E-Commerce

· Inability to control potential rising costs related to merchandise

Significant Risks: identified risks that involve special audit consideration because they have significant risk of material misstatement

· Account specific risks related to Revenue, Inventory, and Accounts Receivable.

· Accounts payable and accrued liabilities comprises the majority of GameStop liabilities. If GameStop encounters issues with collectability on its own receivables or sales decline, the company could have issues paying its debt resulting in borrowing or other financial obligations and accrue large interest expenses.

Revenue

Revenue is the largest account reported on GameStop’s financials. Revenues have a high risk of potential misstatement that would affect investors’ decisions about the company’s overall well-being. GameStop has high inherent risk because many incidences of fraud involve overstatement of revenue and account receivable. Furthermore, decline in sales due to economic declines, product obsolescence, increased competition, and technology improvements can result in fraud or overstatement of revenues.

Revenue recognition

The company recognizes revenue when the sale price is fixed or determinable, collection is reasonably assured and the customer takes possession of the merchandise.

Revenues from the sales of the products is recognized at the time of sale, net of any discounts and net of an estimated sales return based on historical return rates, with corresponding reduction in cost of sales. Sales return policy is limited to less than 30 days.

The sales of pre-owned video game products are recorded at the retail price charged to the customer. Subscription revenue for their PowerUp rewards loyalty program and magazines are recorded on a straight-line basis over the subscription period.

Description of Risks Related to Revenue

Due to the nature of the revenue account, there is a high inherent risk of material misstatement. This is because:

· Revenue is the largest account.

· It is linked with other high risk accounts that heavily rely on estimates. For example, inventory valuation and accounts receivable and allowance accounts. Also effected by sales returns and discounts such as 2/10 n 30.

· Revenue recognition may be based on complex accounting rules.

Factors that contribute to high control risk of revenue:

· Inappropriate revenue recognition of pre-ordered items.

· Improper revenue estimates in regard to used games.

· Inefficient segregation of duties.

· Lack of Control over shipping and billing documents.

· Credit approval for sales transactions.

· Mailing of monthly statements.

· Clerical accuracy checks on invoices.

Inventory

Description of Risks Related to Merchandise Inventory

Inventory is an asset with high inherent risk that arises from business risks faced by management such as risk of losses due to poor product quality, obsolescence, or theft.

Factors that contribute to high inherent risk of inventory:

· Inventory is a large current asset of GameStop. Therefore, it is susceptible to major errors and fraud in recording transactions.

· There are many methods for valuation of inventories and many different methods may be used for various classes of inventories.

· The determination of inventory value affects COGS and has a major impact on net income. If management engages in fraudulent financial reporting, the fraud is likely an overstatement of inventory.

· Buying and selling used games require valuation estimates that can over or under estimate inventory and effect COGS and income.

· The determination of inventory quality, condition, and value is inherently a more complex and difficult task than is the case with most other elements of financial position.

Factors that contribute to high control risk of inventory:

· Inappropriate segregation of duties between recording, authorizing, and custody.

· No use of pre-numbered requisitions, purchase orders, and receiving reports.

· Not using perpetual records for inventories.

· Inappropriate physical controls over inventory.

· Improper procedures for authorizing purchase transactions and verifying them for payment.

Accounts Receivables

Account receivables also can be overstated due to estimation errors, favorable computations, or not recording write-offs or amounts we are not probable to collect.

GameStop had bad year in 2013 when they lost $627 million from goodwill impairment. That would increase the chances for manipulating the numbers or fraud among management to try and provide better numbers for the upcoming years.

Description of Risks Related to Accounts Receivable

Accounts Receivable is an asset with high inherent risk because of:

· The nature of the accounts receivable account and its susceptibility to fraud

· Inability to collect or delay in collecting on receivables

· Errors in the allowance for doubtful account estimates created by management. The valuation of the account can vary based on economic conditions and customers’ ability to pay their credit card balances.

· Recording receivables in the wrong period

Factors that contribute to high control risk of accounts receivable:

· Ineffective internal controls over approving credit terms to customers.

· Writing off bad debts without proper authorization

· Improper and fraudulent recording of cash receipts to receivables

When performing further test procedures, we must assess the design and operation effectiveness of internal control, especially over revenues, revenues recognition policies, controls over shipping and billing documents, segregation of duties of the revenue cycle and so forth. To check the design of internal controls, we can ask management or employees questions regarding internal controls. We can also observe daily operations to try and identify any issues regarding internal controls. Furthermore, we can re-perform or trace a sample of sale transactions.

The overall Risk of Material Misstatement is high. Many companies who are trying to look better are overstating revenues. It is a common fraud and GameStop might be no different. We need to proceed and complete substantive procedures and look for other assertions that might affect the financial statement.

Risk related to business

Technology

The electronic game industry is cyclical and affected by the introduction of next-generation consoles, which could negatively impact the demand for existing products or our pre-owned business.

Following the introduction of new video game platforms, sales of these platforms and related software and accessories generally increase due to initial demand, while sales of older platforms and related products generally decrease as customers migrate toward the new platforms. The company is dependent upon the timely delivery of new and innovative products from our vendors. GameStop depends on major hardware manufacturers, primarily Microsoft, Sony and Nintendo, to deliver new and existing video game platforms and new innovations on a timely basis and in anticipated quantities. In addition, GameStop depends on software publishers to introduce new and updated software titles. The company experienced sales declines in the past due to a reduction in the number of new software titles available for sale. Any material delay in the introduction or delivery, or limited allocations, of hardware platforms or software titles could result in reduced sales.

They may not compete effectively as browser, mobile and social gaming becomes more popular. Gaming continues to evolve rapidly. The popularity of browser, mobile and social gaming has increased greatly and this popularity is expected to continue to grow. Browser, mobile and social gaming is accessed through hardware other than the consoles and traditional hand-held video game devices we currently sell. If GameStop is unable to respond to this growth in popularity of browser, mobile and social games and transition the business to take advantage of these new forms of gaming, their financial position and results of operations could suffer. The company have been and are currently pursuing various strategies to integrate these new forms of gaming into their business model, but there is no assurances that these strategies will be successful or profitable.

Litigations

Litigation and the outcomes of such litigation could negatively impact the future financial condition and results of operations. In the ordinary course of the company’s business, they are, from time to time, subject to various litigation and legal proceedings. In the future, the costs or results of such legal proceedings, individually or in the aggregate, could have a negative impact on their financial condition, results of operations and cash flows.

Goodwill and intangibles

Goodwill can be subjected to impairment, and the company needs to test for it periodically. The company may record future goodwill impairment charges or other asset impairment charges which could negatively impact the future results of operations and financial condition. In recent periods they have recorded significant non-cash charges relating to the impairment of goodwill and other tangible and intangible assets that had a material adverse effect on their consolidated statements of operations and consolidated balance sheets. Because the company have grown in part through acquisitions, goodwill and other acquired intangible assets represent a substantial portion of their assets. They also have long-lived assets consisting of property and equipment and other identifiable intangible assets which they review both on an annual basis as well as when events or circumstances indicate that the carrying amount of an asset may not be recoverable. If a determination is made that a significant impairment in value of goodwill, other intangible assets or long-lived assets has occurred, such determination could require to impair a substantial portion of the assets. Asset impairments could have a material adverse effect on financial conditions and results of operations.

GameStop posted a net loss of $624.3 million for its third quarter ended October 27 due to goodwill and other impairment charges of $678.9 million. This was required under ASC 350 due to temporary decline in the retailer’s stock value during the company’s second quarter.

Audit Program

Accounts Receivable Audit Procedures
	Procedure	Relevant Assertions	W/P Reference	Done by and Date
1.	Obtain an understanding of the client’s internal controls over receivables
2.	Perform tests of design over selected controls
3.	Perform tests of operating effectiveness over significant internal control procedures related to accounts receivable
Substantive Procedures
	Tests of Details
1.	Obtain an aged trial balance of accounts receivable as of year end	Valuation, and Accuracy
2.	Determine adequacy of allowance for uncollectible accounts	Valuation
3.	Ascertain the existence of pledged receivables. Investigate receivables from related parties	Presentation and disclosure
4.	Test accounts receivable for cutoff dates by analyzing unusual transactions that happen near and after year end	Existence, occurrence, Rights, Cutoff, and
5.	Confirm cash receipts from customers after year end	Existence, Valuation, and Accuracy
	Analytical Procedures
1.	Compare prior and current receivable turnover ratio to competitor’s averages.	Valuation and Accuracy

Inventory Audit Procedures
	Procedure	Relevant Assertions	W/P Reference	Done by and Date
1.	Obtain an understanding of the client’s internal controls over inventory
2.	Perform tests of design over selected controls
3.	Perform tests of operating effectiveness over significant internal control procedures related to inventory.
Substantive Procedures
	Tests of Details
1.	Observe the taking of physical inventory and make test counts	Existence Rights Valuation
2.	Review the year-end cutoff of purchases and sales transactions	Existence Occurrence Accuracy Cutoff
3.	Determine if inventory may be obsolete due to damage or being old	Existence Rights Valuation
4.	Evaluate the bases and methods of inventory pricing	Valuation
5.	Test the pricing of inventory	Valuation and Accuracy
6.	Determine whether any inventories have been pledged and review commitments.	Valuation Presentation and disclosure
	Analytical Procedures
1.	Compare current year inventory to past year inventories	Valuation and Accuracy
2.	Compare inventory turnover ratio to competitor’s averages	Valuation and Accuracy

Revenue Audit Procedures
	Procedure	Relevant Assertions	W/P Reference	Done by and Date
1.	Obtain an understanding of the client’s internal controls over sales transactions.
2.	Perform tests of design over selected controls
3.	Perform tests of operating effectiveness over significant internal control procedures related to revenue
Substantive Procedures
	Tests of Details
1.	Review the year-end cutoff of sales transactions in store and online.	Existence, Occurrence, Rights, Completeness, and Cutoff
2.	Vouch sales journal transactions to supporting documentation	Valuation, Accuracy, Existence, Occurrence, Completeness
3.	Determine whether revenue recognition of sales are appropriate	Valuation and Accuracy
4.	Verify clerical accuracy of sales invoices to provide assurance on valuation.	Valuation and Accuracy
	Analytical Procedures
1.	Compare prior year revenues to current period	Valuation, Accuracy, Existence, and Completeness
2.	Evaluate operational budgets and proper adjustments by management when significant deviations exist.	Accuracy, Occurrence, Existence, and Valuation
3.	Comparison of the client’s gross profit percentage to published industry averages.	Valuation and Accuracy

Sources

GameStop 10-K:

GameStop Corporation, 2014 Annual Report, February 1, 2015, PDF, Accessed November 20, 2015

GameStop Company History:

GameStop. "Company History." GameStop.com. GameStop, 2015. Web. 20 Nov. 2015. <http://news.gamestop.com/about_us/company_history>.

GameStop Board of Directors:

GameStop. "Board of Directors." GameStop.com. GameStop, 2015. Web. 20 Nov. 2015. <http://investor.gamestop.com/phoenix.zhtml?c=130125&p=irol-govboard>.

ESRB.org:

Entertainment Software Association. "Game Ratings Enforcement." Entertainment Software Ratings Boars. ESRB, 2015. Web. 20 Nov. 2015. <https://www.esrb.org/ratings/enforcement.aspx>.

19

Period Ending

01/31/2015

Period Ending

02/01/2014Variance% Change

Net Sales:

New video game hardware $2,028.7$1,730.0$298.717.3%

New video game software$3,089.0$3,480.9($391.9)-11.3%

Pre-owned and value video game products$2,389.3$2,329.8$59.52.6%

Video game accessories$653.6$560.6$93.016.6%

Digital$216.3$217.7($1.4)-0.6%

Mobile and consumer electronics$518.8$303.7$215.170.8%

Other $400.3$416.8($16.5)-4.0%

Total$9,296.0$9,039.5$256.52.8%

Revenue - Detail ($ in Millions)

Exhibit A-1

Period Ending

01/31/2015Gross Profit %

Period Ending

02/01/2014Gross Profit %% Change

Gross Profit:

New video game hardware $196.69.7%$176.510.2%-0.5%

New video game software$716.923.2%$805.323.1%0.1%

Pre-owned and value video game products$1,146.348.0%$1,093.947.0%1.0%

Video game accessories$246.137.7%$220.539.3%-1.7%

Digital$152.070.3%$149.268.5%1.7%

Mobile and consumer electronics$186.736.0%$65.121.4%14.6%

Other $131.332.8%$150.636.1%-3.3%

Total$2,775.929.9%$2,661.129.4%0.4%

Gross Profit Detail ($ in Millions)

Exhibit A-2

31-Jan-151-Feb-14Variance%Change

Materiality

(1 - Yes, 0 - No)

Footnote

Reference

ASSETS

Current assets:

Cash and cash equivalents$610.1$536.2$73.913.8%0

Receivables, net$113.5$84.4$29.134.5%0A

Merchandise inventories, net$1,144.8$1,198.9($54.1)-4.5%0

Deferred income taxes current$65.6$51.7$13.926.9%0

Prepaid expenses and other current assets$128.5$78.4$50.163.9%0

TOTAL CURRENT ASSETS$2,062.5$1,949.6$112.95.8%0

Property and equipment:

Land$18.3$20.4($2.1)-10.3%0

Buildings and leasehold improvements$609.2$609.6($0.4)-0.1%0

Fixtures and equipment$888.2$841.8$46.45.5%0

TOTAL PROPERTY AND EQUIPMENT$1,515.7$1,471.8$43.93.0%0

Less accumulated depreciation$1,061.5$995.6$65.96.6%0

Net property and equipment$454.2$476.2($22.0)-4.6%0

Goodwill$1,390.4$1,414.7($24.3)-1.7%0B

Other intangible assets, net$237.8$194.3$43.522.4%0

Other noncurrent assets$101.4$56.6$44.879.2%0

TOTAL NONCURRENT ASSETS$2,183.8$2,141.8$42.02.0%0

TOTAL ASSETS$4,246.3$4,091.4$154.93.8%0

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:

Accounts payable$815.6$783.9$31.74.0%0

Accrued liabilities$803.6$861.7($58.1)-6.7%0

Income taxes payable$15.4$78.0($62.6)-80.3%0

Notes payable$5.1$2.4$2.7112.5%0

TOTAL CURRENT LIABILITIES$1,639.7$1,726.0($86.3)-5.0%0

Deferred income taxes$95.9$37.4$58.5156.4%0

Long-term debt$350.6$1.6$349.021812.5%1C

Other long-term liabilities$92.4$75.0$17.423.2%0

TOTAL LONG TERM LIABILITIES$538.9$114.0$424.9372.7%

TOTAL LIABILITIES$2,178.6$1,840.0$338.618.4%

STOCKHOLDERS' EQUITY:

Preferred stock $0.0$0.0

Class A common stock $.001 par value$0.1$0.1$0.00.0%0

Additional paid-in-capital$0.0$172.9($172.9)-100.0%0D

Accumulated other comprehensive income (loss)($25.4)$82.5($107.9)-130.8%0E

Retained earnings$2,093.0$1,995.9$97.14.9%0

TOTAL STOCKHOLDERS' EQUITY$2,067.7$2,251.4($183.7)-8.2%

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$4,246.3$4,091.4$154.93.8%

GameStop Corp. Comparitive Balance Sheet ($ in Millions)

Materiality: Variances > 5% of Total Assets ($212,315,000) and/or items deemed unusual

31-Jan-151-Feb-14

Bankcard receivables$52.9$42.6

Other Receivables$64.3$45.5

Allowance for doubtful accounts($3.7)($3.7)

Total receivables, net$113.5$84.4

Exhibit A-3

Gamestop Corp - Calculation of Receivables, Net

Period Ending

01/31/2015

Period Ending

02/01/2014Variance% Change

Materiality

(1-Yes, 0-No)

Footnote

Reference

Net sales$9,296.00$9,039.50$256.502.84%1A

Cost of sales$6,520.10$6,378.40$141.702.22%1B

Gross profit$2,775.90$2,661.10$114.804.31%

Selling, general and administrative expenses$2,001.00$1,892.40$108.605.74%1C

Depreciation and amortization$154.40$166.50($12.10)-7.27%0D

Goodwill impairments$10.20($10.20)-100.00%

Asset impairments$2.20$18.50($16.30)-88.11%0E

Operating earnings (loss)$618.30$573.50$44.807.81%

Interest expense, net$10.00$4.70$5.30112.77%0

Earnings (loss) before income tax expense$608.30$568.80$39.506.94%

Income tax expense$215.20$214.60$0.600.28%0

Net income (loss)$393.10$354.20$38.9010.98%

Materiality: Variances greater than or equal to 5% of Net Income ($19,655,000) and Items Deemed Unusual

GameStop Corp.

Comparitive Consolidated Income Statement ($ in Millions)

% Change in Account Balances from YE 2014 to YE 2015