PROPERTY AND EQUIPMENT, NET

12 Months Ended

Aug. 31, 2014

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

Property and equipment are stated at historical cost. The historical cost of acquiring an asset includes the costs incurred to bring it to the condition and location necessary for its intended use. Depreciation is computed on the straight-line basis over the estimated useful lives of the assets. The useful life of fixtures and equipment ranges from three to 15 years and that of certain components of building improvements and buildings from 10 to 25 years. Leasehold improvements are amortized over the shorter of the life of the improvement or the expected term of the lease. In some locations, leasehold improvements are amortized over a period longer than the initial lease term where management believes it is reasonably assured that the renewal option in the underlying lease will be exercised as an economic penalty may be incurred if the option is not exercised. The sale or purchase of property and equipment is recognized upon legal transfer of property. For property and equipment sales, if any long-term notes are carried by the Company as part of the sales terms, the sale is reflected at the net present value of current and future cash streams.

Property and equipment consist of the following (in thousands):

	August 31,
	2014			2013
Land and land improvements	$	124,082		$	100,108
Building and building improvements	244,485			228,257
Fixtures and equipment	148,143			119,242
Construction in progress	55,664			23,657
Total property and equipment, historical cost	572,374			471,264
Less: accumulated depreciation	(146,049		)	(132,786		)
Property and equipment, net	$	426,325		$	338,478

Depreciation and amortization expense (in thousands):

	Years Ended August 31,
	2014		2013		2012
Depreciation and amortization expense	$	28,475	$	24,444	$	23,739

The Company capitalizes interest on expenditures for qualifying assets over a period that covers the duration of the activities required to get the asset ready for its intended use, provided that expenditures for the asset have been made and interest cost is being incurred. Interest capitalization continues as long as those activities and the incurrence of interest cost continue. The amount capitalized in an accounting period is determined by applying the capitalization rate (average interest rate) to the average amount of accumulated expenditures for the qualifying asset during the period. The capitalization rates are based on the interest rates applicable to borrowings outstanding during the period.

Total interest capitalized (in thousands):

	As of August 31, 2014		As of August 31, 2013
Total interest capitalized	$	6,542	$	5,560

Total interest capitalized (in thousands):

	Twelve Months Ended August 31,
	2014		2013		2012
Interest capitalized	$	1,482	$	1,353	$	250

A summary of asset disposal activity for fiscal years 2014, 2013 and 2012 is as follows (in thousands):

	Historical Cost		Accumulated Depreciation		Other Costs		Proceeds from disposal		Gain/(Loss) recognized
Fiscal Year 2014	$	14,733	$	13,146	$	—	$	142	$	(1,445	)
Fiscal Year 2013	$	5,282	$	4,129	$	—	$	264	$	(889	)
Fiscal Year 2012	$	4,700	$	4,250	$	—	$	138	$	(312	)

The Company recorded within accounts payable and other accrued expenses at the end of fiscal year 2014 approximately $1.9 million and $1.2 million, respectively, in liabilities related to the acquisition and/or construction of property and equipment. As of the end of fiscal year 2013, the Company recorded within other accrued expenses approximately $3.2 million in liabilities, related to the acquisition of land in Tegucigalpa, Honduras, upon which the Company constructed and opened its third warehouse club in Honduras in the spring of 2014.