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Accounting Policies<br />
•Revenue Recognition: The PSS has a system where it sells<br />
prescription drugs through its mail service. It then recognizes<br />
revenues through its mail service pharmacies and under retail<br />
pharmacy network contracts. It then uses the gross method in<br />
order to contract the prices negotiated with customers.<br />
•Cash and cash equivalents: are comprised of cash and temporary<br />
investments with maturities that may last up to three months<br />
maximum. <strong>CVS</strong> then invests in commercial paper, short-term<br />
money market funds, and time deposits.<br />
•Inventories: Inventories of <strong>CVS</strong> are stated at the lower of cost or<br />
market using FIFO method. Inventory and cost of sales are then<br />
determined.<br />
•Property and equipment: Improvements, equipment, and<br />
property of its leased stores are depreciated. This is done using<br />
the straight-line method.
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