COSTCO WHOLESALE CORP /NEW, 10-K filed on 10/5/2022
Annual Report
v3.22.2.2
Cover - USD ($)
 12 Months Ended
Aug. 28, 2022
Sep. 27, 2022
Feb. 13, 2022
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Aug. 28, 2022    
Document Fiscal Year Focus 2022    
Document Transition Report false    
Entity File Number 0-20355    
Entity Registrant Name COSTCO WHOLESALE CORP /NEW    
Entity Incorporation, State or Country Code WA    
Entity Tax Identification Number 91-1223280    
Entity Address, Address Line One 999 Lake Drive    
Entity Address, City or Town Issaquah    
Entity Address, State or Province WA    
Entity Address, Postal Zip Code 98027    
City Area Code 425    
Local Phone Number 313-8100    
Title of 12(b) Security Common Stock, $.005 Par Value    
Trading Symbol COST    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Public Float     $ 225,434,477,639
Entity Common Stock, Shares Outstanding   442,604,145  
Amendment Flag false    
Document Fiscal Period Focus FY    
Entity Central Index Key 0000909832    
Current Fiscal Year End Date --08-28    
Documents Incorporated by Reference Portions of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held on January 19, 2023, are incorporated by reference into Part III of this Form 10-K.    
v3.22.2.2
Audit Information
 12 Months Ended
Aug. 28, 2022
Auditor Information [Abstract]  
Auditor Name KPMG LLP
Auditor Location Seattle, WA
Auditor Firm ID 185
v3.22.2.2
Consolidated Statements Of Income - USD ($)
shares in Thousands, $ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
REVENUE      
Total revenue $ 226,954 $ 195,929 $ 166,761
OPERATING EXPENSES      
Merchandise costs 199,382 170,684 144,939
Selling, general and administrative 19,779 18,537 16,387
Operating Income 7,793 6,708 5,435
OTHER INCOME (EXPENSE)      
Interest expense (158) (171) (160)
Interest income and other, net 205 143 92
INCOME BEFORE INCOME TAXES 7,840 6,680 5,367
Provision for income taxes 1,925 1,601 1,308
Net income including noncontrolling interests 5,915 5,079 4,059
Net income attributable to noncontrolling interests (71) (72) (57)
NET INCOME ATTRIBUTABLE TO COSTCO $ 5,844 $ 5,007 $ 4,002
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:      
Basic (in dollars per share) $ 13.17 $ 11.30 $ 9.05
Diluted (in dollars per share) $ 13.14 $ 11.27 $ 9.02
Shares used in calculation (000's)      
Basic (shares) 443,651 443,089 442,297
Diluted (shares) 444,757 444,346 443,901
Net sales      
REVENUE      
Total revenue $ 222,730 $ 192,052 $ 163,220
Membership fees      
REVENUE      
Total revenue $ 4,224 $ 3,877 $ 3,541
v3.22.2.2
Consolidated Statements Of Comprehensive Income - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Statement of Comprehensive Income [Abstract]      
NET INCOME INCLUDING NONCONTROLLING INTERESTS $ 5,915 $ 5,079 $ 4,059
Foreign-currency translation adjustment and other, net (721) 181 162
Comprehensive income 5,194 5,260 4,221
Less: Comprehensive income attributable to noncontrolling interests 36 93 80
COMPREHENSIVE INCOME ATTRIBUTABLE TO COSTCO $ 5,158 $ 5,167 $ 4,141
v3.22.2.2
Consolidated Balance Sheets - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
CURRENT ASSETS    
Cash and cash equivalents $ 10,203 $ 11,258
Short-term investments 846 917
Receivables, net 2,241 1,803
Merchandise inventories 17,907 14,215
Other current assets 1,499 1,312
Total current assets 32,696 29,505
OTHER ASSETS    
Property and Equipment, net 24,646 23,492
Operating lease right-of-use assets 2,774 2,890
Other long-term assets 4,050 3,381
Total assets 64,166 59,268
CURRENT LIABILITIES    
Accounts payable 17,848 16,278
Accrued salaries and benefits 4,381 4,090
Accrued member rewards 1,911 1,671
Deferred membership fees 2,174 2,042
Current portion of long-term debt [1] 73 799
Other current liabilities 5,611 4,561
Total current liabilities 31,998 29,441
OTHER LIABILITIES    
Long-term debt, excluding current portion 6,484 6,692
Long-term operating lease liabilities 2,482 2,642
Other long-term liabilities 2,555 2,415
Total liabilities 43,519 41,190
EQUITY    
Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding 0 0
Common Stock $.005 par value; 100,000,000 shares authorized; 442,664,000 and 441,825,000 shares issued and outstanding 2 4
Additional paid-in capital 6,884 7,031
Accumulated other comprehensive loss (1,829) (1,137)
Retained earnings 15,585 11,666
Total Costco stockholders' equity 20,642 17,564
Noncontrolling interests 5 514
Total equity 20,647 18,078
TOTAL LIABILITIES AND EQUITY $ 64,166 $ 59,268
[1] Net of unamortized debt discounts and issuance costs.
v3.22.2.2
Consolidated Balance Sheets (Parenthetical) - $ / shares
Aug. 28, 2022
Aug. 29, 2021
Statement of Financial Position [Abstract]    
Preferred stock, par value (in dollars per share) $ 0.005 $ 0.005
Preferred stock, shares authorized 100,000,000 100,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.005 $ 0.005
Common stock, shares authorized 900,000,000 900,000,000
Common stock, shares issued 442,664,000 441,825,000
Common stock, shares outstanding 442,664,000 441,825,000
v3.22.2.2
Consolidated Statements of Equity - USD ($)
shares in Thousands, $ in Millions
Total
Total Costco Stockholders' Equity
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings
Noncontrolling Interests
Common stock at beginning of period (shares) at Sep. 01, 2019     439,625        
Equity at beginning of period at Sep. 01, 2019 $ 15,584 $ 15,243 $ 4 $ 6,417 $ (1,436) $ 10,258 $ 341
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 4,059 4,002       4,002 57
Foreign-currency translation adjustment and other, net 162 139     139   23
Stock-based compensation 621 621   621      
Release of vested RSUs, including tax effects (shares)     2,273        
Release of vested RSUs, including tax effects $ (330) (330)   (330)      
Stock Repurchased and Retired During Period, Shares (643)   (643)        
Stock Repurchased and Retired During Period, Value $ (198) (198)   (10)   (188)  
Cash dividends declared and other (1,193) (1,193)       (1,193)  
Common stock at end of period (shares) at Aug. 30, 2020     441,255        
Equity at end of period at Aug. 30, 2020 18,705 18,284 $ 4 6,698 (1,297) 12,879 421
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 5,079 5,007       5,007 72
Foreign-currency translation adjustment and other, net 181 160     160   21
Stock-based compensation 668 668   668      
Release of vested RSUs, including tax effects (shares)     1,928        
Release of vested RSUs, including tax effects $ (312) (312)   (312)      
Stock Repurchased and Retired During Period, Shares (1,358)   (1,358)        
Stock Repurchased and Retired During Period, Value $ (495) (495)   (23)   (472)  
Cash dividends declared and other $ (5,748) (5,748)       (5,748)  
Common stock at end of period (shares) at Aug. 29, 2021 441,825   441,825        
Equity at end of period at Aug. 29, 2021 $ 18,078 17,564 $ 4 7,031 (1,137) 11,666 514
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 5,915 5,844       5,844 71
Foreign-currency translation adjustment and other, net (721) (686)     (686)   (35)
Stock-based compensation 728 728   728      
Release of vested RSUs, including tax effects (shares)     1,702        
Release of vested RSUs, including tax effects (363) (363)   (363)      
Dividend to noncontrolling interest (208)           (208)
Acquisition of noncontrolling interest $ (842) (505)   (499) (6)   (337)
Stock Repurchased and Retired During Period, Shares (863)   (863)        
Stock Repurchased and Retired During Period, Value $ (442) (442)   (15)   (427)  
Stockholders' Equity, Other     $ (2) 2      
Cash dividends declared and other $ (1,498) (1,498)       (1,498)  
Common stock at end of period (shares) at Aug. 28, 2022 442,664   442,664        
Equity at end of period at Aug. 28, 2022 $ 20,647 $ 20,642 $ 2 $ 6,884 $ (1,829) $ 15,585 $ 5
v3.22.2.2
Consolidated Statements Of Cash Flows - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income including noncontrolling interests $ 5,915 $ 5,079 $ 4,059
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:      
Depreciation and amortization 1,900 1,781 1,645
Non-cash lease expense 377 286 194
Stock-based compensation 724 665 619
Other non-cash operating activities, net 76 85 42
Deferred income taxes (37) 59 104
Changes in operating assets and liabilities:      
Merchandise inventories (4,003) (1,892) (791)
Accounts payable 1,891 1,838 2,261
Other operating assets and liabilities, net 549 1,057 728
Net Cash Provided by (Used in) Operating Activities 7,392 8,958 8,861
CASH FLOWS FROM INVESTING ACTIVITIES      
Purchases of short-term investments (1,121) (1,331) (1,626)
Maturities and sales of short-term investments 1,145 1,446 1,678
Additions to property and equipment (3,891) (3,588) (2,810)
Acquisitions 0 0 (1,163)
Other investing activities, net (48) (62) 30
Net Cash Provided by (Used in) Investing Activities (3,915) (3,535) (3,891)
CASH FLOWS FROM FINANCING ACTIVITIES      
Proceeds from issuance of long-term debt 0 0 3,992
Repayments of long-term debt (800) (94) (3,200)
Tax withholdings on stock-based awards (363) (312) (330)
Repurchases of common stock (439) (496) (196)
Cash dividend payments (1,498) (5,748) (1,479)
Dividend to noncontrolling interest (208) 0 0
Acquisition of noncontrolling interest (842) 0 0
Other financing activities, net (133) 162 66
Net Cash Provided by (Used in) Financing Activities (4,283) (6,488) (1,147)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (249) 46 70
Net change in cash and cash equivalents (1,055) (1,019) 3,893
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR 11,258 12,277 8,384
CASH AND CASH EQUIVALENTS END OF YEAR 10,203 11,258 12,277
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:      
Interest 145 149 124
Income taxes paid, net 1,940 1,527 1,052
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:      
Changes in accrued property and equipment $ 156 $ 184 $ 204
v3.22.2.2
Summary of Significant Accounting Policies
 12 Months Ended
Aug. 28, 2022
Accounting Policies [Abstract]  
Significant Accounting Policies
Note 1—Summary of Significant Accounting Policies
Description of Business
Costco Wholesale Corporation (Costco or the Company), a Washington corporation, and its subsidiaries operate membership warehouses based on the concept that offering members low prices on a limited selection of nationally-branded and private-label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover. At August 28, 2022, Costco operated 838 warehouses worldwide: 578 in the United States (U.S.) located in 46 states, Washington, D.C., and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom (U.K.), 17 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland. The Company operates e-commerce websites in the U.S., Canada, U.K., Mexico, Korea, Taiwan, Japan, and Australia.
Basis of Presentation
The consolidated financial statements include the accounts of Costco, its wholly-owned subsidiaries, and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in consolidation. During 2022, the Company paid a cash dividend of $208 and purchased the equity interest of its Taiwan operations from its former joint-venture partner for $842, totaling $1,050 in the aggregate. The remaining noncontrolling interest represents the portion of equity interests in a consolidated joint venture that is not 100% owned by the Company. Unless otherwise noted, references to net income relate to net income attributable to Costco.
Fiscal Year End
The Company operates on a 52/53-week fiscal year basis with the year ending on the Sunday closest to August 31. References to 2022, 2021, and 2020 relate to the 52-week fiscal years ended August 28, 2022, August 29, 2021, and August 30, 2020, respectively.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable. Actual results could differ from those estimates and assumptions.
Reclassification
Reclassifications were made to our 2021 and 2020 consolidated statements of income and cash flows to conform with current year presentation.
Cash and Cash Equivalents
The Company considers as cash and cash equivalents all cash on deposit, highly liquid investments with a maturity of three months or less at the date of purchase, and proceeds due from credit and debit card transactions with settlement terms of up to four days. Credit and debit card receivables were $2,010 and $1,816 at the end of 2022 and 2021.
The Company provides for the daily replenishment of major bank accounts as payments are presented. Included in accounts payable at the end of 2022 and 2021, are $995 and $999 representing the excess of outstanding payments over cash on deposit at the banks on which the payments were drawn.
Short-Term Investments
Short-term investments generally consist of debt securities (U.S. Government and Agency Notes), with maturities at the date of purchase of three months to five years. Investments with maturities beyond five years may be classified, based on the Company’s determination, as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Short-term investments classified as available-for-sale are recorded at fair value using the specific identification method with the unrealized gains and losses reflected in accumulated other comprehensive income (loss) until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis and are recorded in interest income and other, net in the consolidated statements of income. These available-for-sale investments have a low level of inherent credit risk given they are issued by the U.S. Government and Agencies. Changes in their fair value are primarily attributable to changes in interest rates and market liquidity. Short-term investments classified as held-to-maturity are financial instruments that the Company has the intent and ability to hold to maturity and are reported net of any related amortization and are not remeasured to fair value on a recurring basis.
The Company periodically evaluates unrealized losses in its investment securities for credit impairment, using both qualitative and quantitative criteria. In the event a security is deemed to be impaired as the result of a credit loss, the Company recognizes the loss in interest income and other, net in the consolidated statements of income.
Fair Value of Financial Instruments
The Company accounts for certain assets and liabilities at fair value. The carrying value of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable, approximate fair value due to their short-term nature or variable interest rates. See Notes 2, 3, and 4 for the carrying value and fair value of the Company’s investments, derivative instruments, and fixed-rate debt, respectively.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying a fair value hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs are:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market
data.
Level 3: Significant unobservable inputs that are not corroborated by market data.
The Company’s valuation techniques used to measure the fair value of money market mutual funds are based on quoted market prices, such as quoted net asset values published by the fund as supported in an active market. Valuation methodologies used to measure the fair value of all other non-derivative financial instruments are based on independent external valuation information. The pricing process uses data from a variety of independent external valuation information providers, including trades, bid price or spread, two-sided markets, quotes, benchmark curves including but not limited to treasury benchmarks and LIBOR or Secured Overnight Financing Rate and swap curves, discount rates, and market data feeds. All are observable in the market or can be derived principally from or corroborated by observable market data. The Company reports transfers in and out of Levels 1, 2, and 3, as applicable, using the fair
value of the individual securities as of the beginning of the reporting period in which the transfer(s) occurred.
Current financial liabilities have fair values that approximate their carrying values. Long-term financial liabilities include the Company's long-term debt, which are recorded on the balance sheet at issuance price and adjusted for unamortized discounts or premiums and debt issuance costs, and are being amortized to interest expense over the term of the loan. The estimated fair value of the Company's long-term debt is based primarily on reported market values, recently completed market transactions, and estimates based upon interest rates, maturities, and credit.
Receivables, Net
Receivables consist primarily of vendor, credit card incentive, reinsurance, third-party pharmacy and other receivables. Vendor receivables include discounts and volume rebates. Balances are generally presented on a gross basis, separate from any related payable due. In certain circumstances, these receivables may be settled against the related payable to that vendor, in which case the receivables are presented on a net basis. Credit card incentive receivables primarily represent amounts earned under the co-branded credit card arrangements in the U.S. and Canada. Reinsurance receivables are held by the Company’s wholly-owned captive insurance subsidiary and primarily represent amounts ceded through reinsurance arrangements gross of the amounts assumed under reinsurance, which are presented within other current liabilities in the consolidated balance sheets. Third-party pharmacy receivables generally relate to amounts due from members’ insurers. Other receivables primarily consist of amounts due from governmental entities, mostly tax-related items.
The valuation allowance related to receivables was not material to our consolidated financial statements at the end of 2022, 2021, and 2020.
Merchandise Inventories
Merchandise inventories consist of the following:
20222021
United States $13,160 $10,248 
Canada1,966 1,456 
Other International2,781 2,511 
Merchandise inventories$17,907 $14,215 
Merchandise inventories are stated at the lower of cost or market. U.S. merchandise inventories are valued by the cost method of accounting, using the last-in, first-out (LIFO) basis. The Company believes the LIFO method more fairly presents the results of operations by more closely matching current costs with current revenues. The Company records an adjustment each quarter, if necessary, for the projected annual effect of inflation or deflation, and these estimates are adjusted to actual results determined at year-end, after actual inflation or deflation rates and inventory levels have been determined. Due to inflation, a $438 charge was recorded during 2022 to merchandise costs to increase the cumulative LIFO valuation on merchandise inventories at August 28, 2022. An immaterial LIFO charge was recorded in 2021. Canadian and Other International merchandise inventories are predominantly valued using the cost and retail inventory methods, respectively, using the first-in, first-out (FIFO) basis.
The Company provides for estimated inventory losses between physical inventory counts using estimates based on experience. The provision is adjusted periodically to reflect physical inventory counts, which generally occur in the second and fourth fiscal quarters. Inventory cost, where appropriate, is reduced by estimates of vendor rebates when earned or as the Company progresses towards earning those rebates, provided that they are probable and reasonably estimable.
Property and Equipment, Net
Property and equipment are stated at cost. Depreciation and amortization expense is computed primarily using the straight-line method over estimated useful lives. Leasehold improvements made after the beginning of the initial lease term are depreciated over the shorter of the estimated useful life of the asset or the remaining term of the initial lease plus any renewals that are reasonably certain at the date the leasehold improvements are made.
The Company capitalizes certain computer software and costs incurred in developing or obtaining software for internal use. During development, these costs are included in construction in progress. To the extent that the assets become ready for their intended use, these costs are included in equipment and fixtures and amortized on a straight-line basis over their estimated useful lives. In 2022 and 2021, the Company recognized in SG&A expenses write-offs of $118 and $84 for certain information technology assets.
Repair and maintenance costs are expensed when incurred. Expenditures for remodels, refurbishments and improvements that add to or change asset function or useful life are capitalized. Assets removed during the remodel, refurbishment or improvement are retired. Assets classified as held-for-sale at the end of 2022 and 2021 were immaterial.
The following table summarizes the Company's property and equipment balances at the end of 2022 and 2021:
Estimated Useful Lives20222021
LandN/A$7,955 $7,507 
Buildings and improvements
5-50 years
20,120 19,139 
Equipment and fixtures
3-20 years
10,275 9,505 
Construction in progressN/A1,582 1,507 
39,932 37,658 
Accumulated depreciation and amortization(15,286)(14,166)
Property and equipment, net$24,646 $23,492 
The Company evaluates long-lived assets for impairment on an annual basis, when relocating or closing a facility, or when events or changes in circumstances may indicate the carrying amount of the asset group, generally an individual warehouse, may not be fully recoverable. For asset groups held and used, including warehouses to be relocated, the carrying value of the asset group is considered recoverable when the estimated future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment loss is recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. For asset groups classified as held-for-sale (disposal group), the carrying value is compared to the disposal group’s fair value less costs to sell. The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques. There were no impairment charges recognized in 2022 or 2020. Impairment charges recognized in 2021 were immaterial.
Leases
The Company leases land, buildings, and/or equipment at warehouses and certain other office and distribution facilities. Leases generally contain one or more of the following options, which the Company can exercise at the end of the initial term: (a) renew the lease for a defined number of years at the then-fair market rental rate or rate stipulated in the lease agreement; (b) purchase the property at the then-fair market value; or (c) a right of first refusal in the event of a third-party offer.
Some leases include free-rent periods and step-rent provisions, which are recognized on a straight-line basis over the original term of the lease and any extension options that the Company is reasonably certain to exercise from the date the Company has control of the property. Certain leases provide for periodic rent increases based on price indices or the greater of minimum guaranteed amounts or sales volume. Our leases do not contain any material residual value guarantees or material restrictive covenants.
The Company determines at inception whether a contract is or contains a lease. Non-lease components and the lease components to which they relate are accounted for together as a single lease component for all asset classes. The Company initially records right-of-use (ROU) assets and lease obligations for its finance and operating leases based on the discounted future minimum lease payments over the term. The lease term is defined as the noncancelable period of the lease plus any options to extend when it is reasonably certain that the Company will exercise the option. As the rate implicit in the Company's leases is not easily determinable, the present value of the sum of the lease payments is calculated using the Company's incremental borrowing rate. The rate is determined using a portfolio approach based on the rate of interest the Company would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses quoted interest rates from financial institutions to derive the incremental borrowing rate. Impairment of ROU assets is evaluated in a similar manner as described in Property and Equipment, net above.
The Company's asset retirement obligations (ARO) primarily relate to leasehold improvements that must be removed at the end of a lease. These obligations are generally recorded as a discounted liability, with an offsetting asset at the inception of the lease term, based upon the estimated fair value of the costs to remove the improvements. These liabilities are accreted over time to the projected future value of the obligation. The ARO assets are depreciated using the same depreciation method as the leasehold improvement assets and are included with buildings and improvements. Estimated ARO liabilities associated with these leases are included in other liabilities in the accompanying consolidated balance sheet.
Goodwill and Acquired Intangible Assets
Goodwill represents the excess of acquisition cost over the fair value of the net assets acquired and is not subject to amortization. The Company reviews goodwill annually in the fourth quarter for impairment or when circumstances indicate carrying value may exceed the fair value. This evaluation is performed at the reporting unit level. If a qualitative assessment indicates that it is more likely than not that the fair value is less than carrying value, a quantitative analysis is completed using either the income or market approach, or a combination of both. The income approach estimates fair value based on expected discounted future cash flows, while the market approach uses comparable public companies and transactions to develop metrics to be applied to historical and expected future operating results.
Goodwill is included in other long-term assets in the consolidated balance sheets. The following table summarizes goodwill by reportable segment:
United States Canada Other International Total
Balance at August 30, 2020$947 $27 $14 $988 
Changes in currency translation and other (1)
6 1 1 8 
Balance at August 29, 2021$953 $28 $15 $996 
Changes in currency translation— (1)(2)(3)
Balance at August 28, 2022$953 $27 $13 $993 
____________
(1)Other consists of changes to the purchase price allocation.
Definite-lived intangible assets, which are not material, are included in other long-term assets on the consolidated balance sheets and are amortized on a straight-line basis over their estimated lives, which approximates the pattern of expected economic benefit.
Insurance/Self-insurance Liabilities
Claims for employee health care benefits, workers’ compensation, general liability, property damage, directors’ and officers’ liability, vehicle liability, inventory loss, and other exposures are funded predominantly through self-insurance. Insurance coverage is maintained for certain risks to limit exposures arising from very large losses. The Company uses different risk management mechanisms, including a wholly-owned captive insurance subsidiary (the captive) and participates in a reinsurance program. Liabilities associated with the risks that are retained by the Company are not discounted and are estimated, in part, by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. At the end of 2022 and 2021, these insurance liabilities were $1,364 and $1,257 in the aggregate, respectively, and were included in accrued salaries and benefits and other current liabilities in the consolidated balance sheets, classified based on their nature.
The captive receives direct premiums, which are netted against the Company’s premium costs in selling, general and administrative expenses, in the consolidated statements of income. The captive participates in a reinsurance program that includes other third-party participants. The reinsurance agreement is one year in duration, and new agreements are entered into by each participant at their discretion at the commencement of the next calendar year. The participant agreements and practices of the reinsurance program are designed to limit a participating members’ individual risk. Income statement adjustments related to the reinsurance program and related impacts to the consolidated balance sheets are recognized as information becomes known. In the event the Company leaves the reinsurance program, the Company retains its primary obligation to the policyholders for prior activity.
Derivatives
The Company is exposed to foreign-currency exchange-rate fluctuations in the normal course of business. It manages these fluctuations, in part, through the use of forward foreign-exchange contracts, seeking to economically hedge the impact of fluctuations of foreign exchange on known future expenditures denominated in a non-functional foreign-currency. The contracts relate primarily to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries with functional currencies other than the U.S. dollar. Currently, these contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate risk with the use of these contracts and does not intend to engage in speculative transactions. Some of these contracts contain credit-risk-related contingent features that require settlement of outstanding contracts upon certain triggering events. The aggregate fair value amounts of derivative instruments in a net liability position and the amount needed to settle the instruments immediately if the credit-risk-related contingent features were triggered were immaterial at the end of 2022. There were no derivative instruments in a net liability position at the end of 2021. The aggregate notional amounts of open, unsettled forward foreign-exchange contracts were $1,242 and $1,331 at the end of 2022 and 2021, respectively. See Note 3 for information on the fair value of unsettled forward foreign-exchange contracts at the end of 2022 and 2021.
The unrealized gains or losses recognized in interest income and other, net in the accompanying consolidated statements of income relating to the net changes in the fair value of unsettled forward foreign-exchange contracts were immaterial in 2022, 2021 and 2020.
The Company is exposed to fluctuations in prices for energy, particularly electricity and natural gas, and other commodity products used in retail and manufacturing operations, which it seeks to partially mitigate through the use of fixed-price contracts for certain of its warehouses and other facilities, primarily in the U.S. and Canada. The Company also enters into variable-priced contracts for some purchases of natural gas, in addition to fuel for its gas stations, on an index basis. These contracts meet the characteristics of
derivative instruments, but generally qualify for the “normal purchases and normal sales” exception under authoritative guidance and require no mark-to-market adjustment.
Foreign Currency
The functional currencies of the Company’s international subsidiaries are their local currencies. Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Translation adjustments are recorded in accumulated other comprehensive loss. Revenues and expenses of the Company’s consolidated foreign operations are translated at average exchange rates prevailing during the year.
The Company recognizes foreign-currency transaction gains and losses related to revaluing or settling monetary assets and liabilities denominated in currencies other than the functional currency in interest income and other, net in the consolidated statements of income. Generally, these include the U.S. dollar cash and cash equivalents and the U.S. dollar payables of consolidated subsidiaries revalued to their functional currency. Also included are realized foreign-currency gains or losses from settlements of forward foreign-exchange contracts. These items were $84 in 2022 and immaterial in 2021 and 2020.
Revenue Recognition
The Company recognizes sales for the amount of consideration collected from the member, which includes gross shipping fees where applicable, and is net of sales taxes collected and remitted to government agencies and member returns. The Company reserves for estimated returns based on historical trends in merchandise returns and reduces sales and merchandise costs accordingly. The Company records, on a gross basis, a refund liability and an asset for recovery, which are included in other current liabilities and other current assets, respectively, in the consolidated balance sheets.
The Company offers merchandise in the following core merchandise categories: foods and sundries, non-foods, and fresh foods. The Company also provides expanded products and services through warehouse ancillary and other businesses. The majority of revenue from merchandise sales is recognized at the point of sale. Revenue generated through e-commerce or special orders is generally recognized upon shipment to the member. For merchandise shipped directly to the member, shipping and handling costs are expensed as incurred as fulfillment costs and included in merchandise costs in the consolidated statements of income. In certain ancillary businesses, revenue is deferred until the member picks up merchandise at the warehouse. Deferred sales are included in other current liabilities in the consolidated balance sheets.
The Company is the principal for the majority of its transactions and recognizes revenue on a gross basis. The Company is the principal when it has control of the merchandise or service before it is transferred to the member, which generally is established when Costco is primarily responsible for merchandising decisions, pricing discretion, and maintains the relationship with the member, including assurance of member service and satisfaction.
The Company accounts for membership fee revenue, net of refunds, on a deferred basis, ratably over the one-year membership period. Deferred membership fees at the end of 2022 and 2021 were $2,174 and $2,042, respectively.
In most countries, the Company's Executive members qualify for a 2% reward on qualified purchases, subject to an annual maximum value, which does not expire and is redeemable at Costco warehouses. The Company accounts for this reward as a reduction in sales, net of the estimated impact of non-redemptions (breakage), with the corresponding liability classified as accrued member rewards in the consolidated balance sheets. Estimated breakage is computed based on redemption data. For 2022, 2021, and 2020, the net reduction in sales was $2,307, $2,047, and $1,707 respectively.
The Company sells and otherwise provides proprietary shop cards that do not expire and are redeemable at the warehouse or online for merchandise or membership. Revenue from shop cards is recognized upon redemption, and estimated breakage is recognized based on redemption data. The Company accounts for outstanding shop card balances as a shop card liability, net of estimated breakage. Shop card liabilities are included in other current liabilities in the consolidated balance sheets.
Citibank, N.A. became the exclusive issuer of co-branded credit cards to U.S. members in June 2016. The Company receives various forms of consideration from Citibank, including a royalty on purchases made on the card outside of Costco. A portion of the royalty is used to fund the rebate that cardholders receive, after taking into consideration breakage, which is calculated based on rebate redemption data. The rebates are issued in February and expire on December 31. The Company also maintains co-branded credit card arrangements in Canada and certain other International subsidiaries.
Merchandise Costs
Merchandise costs consist of the purchase price or manufacturing costs of inventory sold, inbound and outbound shipping charges and all costs related to the Company’s depot, fulfillment and manufacturing operations, including freight from depots to selling warehouses, and are reduced by vendor consideration. Merchandise costs also include salaries, benefits, depreciation, and utilities in fresh foods and certain ancillary departments.
Vendor Consideration
The Company has agreements to receive funds from vendors for discounts and a variety of other programs. These programs are evidenced by signed agreements that are reflected in the carrying value of the inventory when earned or as the Company progresses towards earning the rebate or discount, and as a component of merchandise costs as the merchandise is sold. Other vendor consideration is generally recorded as a reduction of merchandise costs upon completion of contractual milestones, terms of the related agreement, or by another systematic approach.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries, benefits and workers’ compensation costs for warehouse employees (other than fresh foods departments and certain ancillary businesses which are reflected in merchandise costs) as well as all regional and home office employees, including buying personnel. Selling, general and administrative expenses also include substantially all building and equipment depreciation, stock compensation expense, credit and debit card processing fees, utilities, preopening, as well as other operating costs incurred to support warehouse and e-commerce website operations.
Retirement Plans
The Company's 401(k) retirement plan is available to all U.S. employees over the age of 18 who have completed 90 days of employment. The plan allows participants to make wage deferral contributions, a portion of which the Company matches. In addition, the Company provides each eligible participant an annual discretionary contribution. The Company also has a defined contribution plan for employees in Canada and contributes a percentage of each employee's wages. Certain subsidiaries in the Company's Other International operations have defined benefit and defined contribution plans, which are not material. Amounts expensed under all plans were $824, $748, and $676 for 2022, 2021, and 2020, and are predominantly included in SG&A expenses in the consolidated statements of income.
Stock-Based Compensation
Restricted Stock Units (RSUs) granted to employees generally vest over five years and allow for quarterly vesting of the pro-rata number of stock-based awards that would vest on the next anniversary of the grant date in the event of retirement or voluntary termination. Actual forfeitures are recognized as they occur.
Compensation expense for stock-based awards is predominantly recognized using the straight-line method over the requisite service period for the entire award. Awards for employees and non-employee directors provide for accelerated vesting based on cumulative years of service with the Company. Compensation expense for the accelerated shares is recognized upon achievement of the long-service term. The cumulative amount of compensation cost recognized at any point in time equals at least the portion of the grant-date fair value of the award that is vested at that date. The fair value of RSUs is calculated as the market value of the common stock on the measurement date less the present value of the expected dividends forgone during the vesting period.
Stock-based compensation expense is predominantly included in SG&A expenses in the consolidated statements of income. Certain stock-based compensation costs are capitalized or included in the cost of merchandise. See Note 7 for additional information on the Company’s stock-based compensation plans.
Income Taxes
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts that are more likely than not expected to be realized.
The timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions requires significant judgment. The benefits of uncertain tax positions are recorded in the Company’s consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge from tax authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes as appropriate.
Net Income per Common Share Attributable to Costco
The computation of basic net income per share uses the weighted average number of shares that were outstanding during the period. The computation of diluted net income per share uses the weighted average number of shares in the basic net income per share calculation plus the number of common shares that would be issued assuming vesting of all potentially dilutive common shares outstanding using the treasury stock method for shares subject to RSUs.
Stock Repurchase Programs
Repurchased shares of common stock are retired, in accordance with the Washington Business Corporation Act. The par value of repurchased shares is deducted from common stock and the excess repurchase price over par value is deducted by allocation to additional paid-in capital and retained earnings. The amount allocated to additional paid-in capital is the current value of additional paid-in capital per share outstanding and is applied to the number of shares repurchased. Any remaining amount is allocated to retained earnings. See Note 6 for additional information.
v3.22.2.2
Investments
 12 Months Ended
Aug. 28, 2022
Investments, Debt and Equity Securities [Abstract]  
Investments
Note 2—Investments
The Company’s investments were as follows:
2022:Cost
Basis		Unrealized
Losses, Net		Recorded
Basis
Available-for-sale:
Government and agency securities$534 $(5)$529 
Held-to-maturity:
Certificates of deposit317 — 317 
Total short-term investments$851 $(5)$846 
2021:Cost
Basis		Unrealized
Gains, Net		Recorded
Basis
Available-for-sale:
Government and agency securities$375 $6 $381 
Held-to-maturity:
Certificates of deposit536 — 536 
Total short-term investments$911 $6 $917 
Gross unrecognized holding gains and losses on available-for-sale securities were not material for the years ended August 28, 2022, and August 29, 2021. At those dates, there were no available-for-sale securities in a material continuous unrealized-loss position. There were no sales of available-for-sale securities during 2022 or 2021.
The maturities of available-for-sale and held-to-maturity securities at the end of 2022 are as follows:
 Available-For-SaleHeld-To-Maturity
 Cost BasisFair Value
Due in one year or less$276 $274 $317 
Due after one year through five years197 195 — 
Due after five years6160— 
       Total$534 $529 $317 
v3.22.2.2
Fair Value Measurement
 12 Months Ended
Aug. 28, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurement
Note 3—Fair Value Measurement
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The table below presents information regarding the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis and indicate the level within the hierarchy reflecting the valuation techniques utilized to determine such fair value.
Level 2
20222021
Investment in government and agency securities(1)
$529 $393 
Forward foreign-exchange contracts, in asset position(2)
34 17 
Forward foreign-exchange contracts, in (liability) position(2)
(2)(2)
Total$561 $408 
 ____________
(1)At August 29, 2021, $12 cash and cash equivalents and $381 short-term investments are included in the consolidated balance sheets.
(2)The asset and the liability values are included in other current assets and other current liabilities, respectively, in the consolidated balance sheets.
At August 28, 2022, and August 29, 2021, the Company did not hold any Level 1 or 3 financial assets or liabilities that were measured at fair value on a recurring basis. There were no transfers between levels during 2022 or 2021.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recognized and disclosed at fair value on a nonrecurring basis include items such as financial assets measured at amortized cost and long-lived nonfinancial assets. These assets are measured at fair value if determined to be impaired. There were no fair value adjustments to nonfinancial assets during 2022 and in 2021 they were immaterial.
v3.22.2.2
Debt
 12 Months Ended
Aug. 28, 2022
Debt Disclosure [Abstract]  
Debt
Note 4—Debt
Short-Term Borrowings
The Company maintains various short-term bank credit facilities, with a borrowing capacity of $1,257 and $1,050, in 2022 and 2021, respectively. Borrowings on these short-term facilities were immaterial during 2022 and 2021. Short-term borrowings outstanding were $88 and $41 at the end of 2022 and 2021.
Long-Term Debt
The Company's long-term debt consists primarily of Senior Notes, described below. On December 1, 2021, the Company repaid, prior to maturity, the 2.300% Senior Notes at a redemption price plus accrued interest as specified in the Notes' agreement.
The Company at its option may redeem the Senior Notes at any time, in whole or in part, at a redemption price plus accrued interest. The redemption price is equal to the greater of 100% of the principal amount or the sum of the present value of the remaining scheduled payments of principal and interest to maturity. Additionally, upon certain events, the holder has the right to require the Company to purchase this security at a price of 101% of the principal amount plus accrued and unpaid interest to the date of the event. Interest on all outstanding long-term debt is payable semi-annually. The estimated fair value of Senior Notes is valued using Level 2 inputs.
Other long-term debt consists of Guaranteed Senior Notes issued by the Company's Japanese subsidiary, valued using Level 3 inputs.
At the end of 2022 and 2021, the fair value of the Company's long-term debt, including the current portion, was approximately $6,033 and $7,692, respectively. The carrying value of long-term debt consisted of the following:
 20222021
2.300% Senior Notes due May 2022
$— $800 
2.750% Senior Notes due May 2024
1,000 1,000 
3.000% Senior Notes due May 2027
1,000 1,000 
1.375% Senior Notes due June 2027
1,250 1,250 
1.600% Senior Notes due April 2030
1,750 1,750 
1.750% Senior Notes due April 2032
1,000 1,000 
Other long-term debt590 731 
Total long-term debt6,590 7,531 
Less unamortized debt discounts and issuance costs33 40 
Less current portion(1)
73 799 
Long-term debt, excluding current portion$6,484 $6,692 
_______________
(1)Net of unamortized debt discounts and issuance costs.
Maturities of long-term debt during the next five fiscal years and thereafter are as follows: 
2023$73 
20241,088 
2025110 
202681 
20272,250 
Thereafter
2,988 
Total
$6,590 
v3.22.2.2
Leases
 12 Months Ended
Aug. 28, 2022
Leases [Abstract]  
Lessee, Operating Leases
Note 5—Leases
The tables below present information regarding the Company's lease assets and liabilities.
20222021
Assets
Operating lease right-of-use assets$2,774 $2,890 
Finance lease assets(1)
1,620 1,000 
Total lease assets$4,394 $3,890 
Liabilities
Current
Operating lease liabilities(2)
$239 $222 
Finance lease liabilities(2)
245 72 
Long-term
Operating lease liabilities2,482 2,642 
Finance lease liabilities(3)
1,383 980 
Total lease liabilities$4,349 $3,916 
 _______________
(1)Included in other long-term assets in the consolidated balance sheets.
(2)Included in other current liabilities in the consolidated balance sheets.
(3)Included in other long-term liabilities in the consolidated balance sheets.
20222021
Weighted-average remaining lease term (years)
Operating leases
2021
Finance leases
1722
Weighted-average discount rate
Operating leases
2.26 %2.16 %
Finance leases
3.97 %4.91 %
The components of lease expense, excluding short-term lease costs and sublease income (which were not material), were as follows:
202220212020
Operating lease costs(1)
$297 $296 $252 
Finance lease costs:
Amortization of lease assets(1)
128 50 31 
Interest on lease liabilities(2)
45 37 33 
Variable lease costs(1)
157 151 87 
Total lease costs$627 $534 $403 
 _______________
(1)Included in selling, general and administrative expenses and merchandise costs in the consolidated statements of income.
(2)Included in interest expense and merchandise costs in the consolidated statements of income.
Supplemental cash flow information related to leases was as follows:
202220212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows — operating leases
$277 $282 $258 
Operating cash flows — finance leases
45 37 33 
Financing cash flows — finance leases
176 67 49 
Operating lease assets obtained in exchange for new or modified leases231 350 354 
Financing lease assets obtained in exchange for new or modified leases794 399 317 
As of August 28, 2022, future minimum payments during the next five fiscal years and thereafter are as follows:
Operating Leases(1)
Finance Leases
2023$277 $288 
2024256 253 
2025210 280 
2026207 119 
2027186 88 
Thereafter2,332 1,191 
Total(2)
3,468 2,219 
Less amount representing interest747 591 
Present value of lease liabilities$2,721 $1,628 
 _______________
(1)Operating lease payments have not been reduced by future sublease income of $83.
(2)Excludes $660 of lease payments for leases that have been signed but not commenced.
v3.22.2.2
Stockholders' Equity
 12 Months Ended
Aug. 28, 2022
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
Note 6—Equity
Dividends
Cash dividends declared in 2022 totaled $3.38 per share, as compared to $12.98 per share in 2021. Dividends in 2021 included a special dividend of $10.00 per share, aggregating approximately $4,430. The Company's current quarterly dividend rate is $0.90 per share.
Stock Repurchase Programs
The Company's stock repurchase program is conducted under a $4,000 authorization by the Board of Directors, which expires in April 2023. As of the end of 2022, the remaining amount available under the approved plan was $2,808. The following table summarizes the Company’s stock repurchase activity:
Shares
Repurchased
(000’s)		Average
Price per
Share		Total Cost
2022863 $511.46 $442 
20211,358 364.39 495 
2020643 308.45 198 
These amounts may differ from repurchases of common stock in the consolidated statements of cash flows due to changes in unsettled stock repurchases at the end of each fiscal year. Purchases are made from time to time, as conditions warrant, in the open market or in block purchases and pursuant to plans under SEC Rule 10b5-1.
v3.22.2.2
Stock-Based Compensation Plans
 12 Months Ended
Aug. 28, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Plans
Note 7—Stock-Based Compensation
The Company grants stock-based compensation, primarily to employees and non-employee directors. Grants to executive officers are generally performance-based. Through a series of shareholder approvals, there have been amended and restated plans and new provisions implemented by the Company. RSUs are subject to quarterly vesting upon retirement or voluntary termination. Employees who attain at least 25 years of service with the Company receive shares under accelerated vesting provisions on the annual vesting date. The 2019 Incentive Plan authorized the issuance of 17,500,000 shares (10,000,000 RSUs) of common stock for future grants, plus the remaining shares that were available for grant and the future forfeited shares from grants under the previous plan, up to a maximum aggregate of 27,800,000 shares (15,885,000 RSUs). The Company issues new shares of common stock upon vesting of RSUs. Shares for vested RSUs are generally delivered to participants annually, net of shares withheld for taxes.
Summary of Restricted Stock Unit Activity
RSUs granted to employees and to non-employee directors generally vest over five and three years, respectively. Additionally, the terms of the RSUs, including performance-based awards, provide for accelerated vesting for employees and non-employee directors who have attained 25 or more and five or more years of service with the Company, respectively. Recipients are not entitled to vote or receive dividends on unvested and undelivered shares. At the end of 2022, 10,445,000 shares were available to be granted as RSUs under the 2019 Incentive Plan.
The following awards were outstanding at the end of 2022:
•3,328,000 time-based RSUs, which vest upon continued employment or service over specified periods of time; and
•121,000 performance-based RSUs, of which 82,000 were granted to executive officers subject to the determination of the attainment of performance targets for 2022. This determination occurred in September 2022, at which time at least 33% of the units vested, as a result of the long service of all executive officers receiving performance-based RSUs. The remaining awards vest upon continued employment over specified periods of time.
The following table summarizes RSU transactions during 2022:
Number of
Units
(in 000’s)		Weighted-Average
Grant Date Fair
Value
Outstanding at the end of 20214,349 $257.88 
Granted1,679 476.06 
Vested and delivered(2,456)290.18 
Forfeited(123)332.84 
Outstanding at the end of 20223,449 $338.41 
The weighted-average grant date fair value of RSUs granted was $476.06, $369.15, and $294.08 in 2022, 2021, and 2020, respectively. The remaining unrecognized compensation cost related to non-vested RSUs at the end of 2022 was $758 and the weighted-average period of time over which this cost will be recognized is 1.6 years. Included in the outstanding balance at the end of 2022 were approximately 1,210,000 RSUs vested but not yet delivered.
Summary of Stock-Based Compensation
The following table summarizes stock-based compensation expense and the related tax benefits:
202220212020
Stock-based compensation expense$724 $665 $619 
Less recognized income tax benefit
154 140 128 
Stock-based compensation expense, net$570 $525 $491 
v3.22.2.2
Income Taxes
 12 Months Ended
Aug. 28, 2022
Income Tax Disclosure [Abstract]  
Income Taxes
Note 8— Taxes
Income Taxes
Income before income taxes is comprised of the following:
202220212020
Domestic$5,759 $4,931 $4,204 
Foreign2,081 1,749 1,163 
Total$7,840 $6,680 $5,367 
The provisions for income taxes are as follows:
202220212020
Federal:
Current$798 $718 $616 
Deferred(35)84 77 
Total federal763 802 693 
State:
Current333 265 230 
Deferred(5)11 8 
Total state328 276 238 
Foreign:
Current851 557 372 
Deferred(17)(34)5 
Total foreign834 523 377 
Total provision for income taxes$1,925 $1,601 $1,308 
The reconciliation between the statutory tax rate and the effective rate for 2022, 2021, and 2020 is as follows:
 202220212020
Federal taxes at statutory rate$1,646 21.0 %$1,403 21.0 %$1,127 21.0 %
State taxes, net267 3.4 243 3.6 190 3.6 
Foreign taxes, net231 3.0 92 1.4 92 1.7 
Employee stock ownership plan (ESOP)(23)(0.3)(91)(1.3)(24)(0.5)
Other(196)(2.5)(46)(0.7)(77)(1.4)
Total$1,925 24.6 %$1,601 24.0 %$1,308 24.4 %
The Company recognized total net tax benefits of $130, $163 and $81 in 2022, 2021 and 2020. These include benefits of $94, $75 and $77, related to stock-based compensation. During 2021, there was a net tax benefit of $70 related to the portion of the special dividend paid through our 401(k) plan.
The components of the deferred tax assets (liabilities) are as follows:
20222021
Deferred tax assets:
Equity compensation$84 $72 
Deferred income/membership fees302 161 
Foreign tax credit carry forward201 146 
Operating lease liabilities727 769 
Accrued liabilities and reserves694 681 
Other5 62 
Total deferred tax assets2,013 1,891 
Valuation allowance(313)(214)
Total net deferred tax assets1,700 1,677 
Deferred tax liabilities:
Property and equipment(962)(935)
Merchandise inventories(231)(216)
Operating lease right-of-use assets(701)(744)
Foreign branch deferreds(85)(92)
Total deferred tax liabilities(1,979)(1,987)
       Net deferred tax liabilities$(279)$(310)

The deferred tax accounts at the end of 2022 and 2021 include deferred income tax assets of $445 and $444, respectively, included in other long-term assets; and deferred income tax liabilities of $724 and $754, respectively, included in other long-term liabilities.
In 2022 and 2021, the Company had valuation allowances of $313 and $214, primarily related to foreign tax credits that the Company believes will not be realized due to carry forward limitations. The foreign tax credit carry forwards are set to expire beginning in fiscal 2030.

The Company generally no longer considers fiscal year earnings of non-U.S. consolidated subsidiaries after 2017 to be indefinitely reinvested (other than China and Taiwan) and has recorded the estimated incremental foreign withholding taxes (net of available foreign tax credits) and state income taxes payable assuming a hypothetical repatriation to the U.S. The Company continues to consider undistributed earnings of certain non-U.S. consolidated subsidiaries, which totaled $2,779, to be indefinitely reinvested and has not provided for withholding or state taxes.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2022 and 2021 is as follows:
20222021
Gross unrecognized tax benefit at beginning of year$33 $30 
Gross increases—current year tax positions1 2 
Gross increases—tax positions in prior years12 2 
Gross decreases—tax positions in prior years(12)— 
Gross decreases—settlements(12)— 
Lapse of statute of limitations(6)(1)
Gross unrecognized tax benefit at end of year$16 $33 
The gross unrecognized tax benefit includes tax positions for which the ultimate deductibility is highly certain but there is uncertainty about the timing of such deductibility. At the end of 2022 and 2021, these amounts were immaterial. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of these tax positions would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority. The total amount of such unrecognized tax benefits that if recognized would favorably affect the effective income tax rate in future periods is $15 and $30 at the end of 2022 and 2021.
Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. Accrued interest and penalties recognized during 2022 and 2021, and accrued at the end of each respective period were not material.
The Company is currently under audit by several jurisdictions in the United States and abroad. Some audits may conclude in the next 12 months, and the unrecognized tax benefits recorded in relation to the audits may differ from actual settlement amounts. It is not practical to estimate the effect, if any, of any amount of such change during the next 12 months to previously recorded uncertain tax positions in connection with the audits. The Company does not anticipate that there will be a material increase or decrease in the total amount of unrecognized tax benefits in the next 12 months.
The Company files income tax returns in the United States, various state and local jurisdictions, in Canada, and in several other foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local examination for years before fiscal 2018. The Company is currently subject to examination in California for fiscal years 2013 to present.
Other Taxes
The Company is subject to multiple examinations for value added, sales-based, payroll, product, import or other non-income taxes in various jurisdictions. In certain cases, the Company has received assessments from the authorities. Possible losses or range of possible losses associated with these matters are either immaterial or an estimate of the possible loss or range of loss cannot be made at this time. If certain matters or a group of matters were to be decided adversely to the Company, it could result in a charge that might be material to the results of an individual fiscal quarter or year.
v3.22.2.2
Net Income per Common and Common Equivalent Share
 12 Months Ended
Aug. 28, 2022
Earnings Per Share [Abstract]  
Net Income Per Common and Common Equivalent Share
Note 9—Net Income per Common and Common Equivalent Share
The following table shows the amounts used in computing net income per share and the weighted average number of shares of basic and of potentially dilutive common shares outstanding (shares in 000’s): 
202220212020
Net income attributable to Costco
$5,844 $5,007 $4,002 
Weighted average basic shares
443,651 443,089 442,297 
RSUs1,106 1,257 1,604 
Weighted average diluted shares
444,757 444,346 443,901 
v3.22.2.2
Commitment and Contingencies
 12 Months Ended
Aug. 28, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Note 10—Commitments and Contingencies
Legal Proceedings
The Company is involved in a number of claims, proceedings and litigations arising from its business and property ownership. In accordance with applicable accounting guidance, the Company establishes an accrual for legal proceedings if and when those matters present loss contingencies that are both probable and reasonably estimable. There may be exposure to loss in excess of amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss (taking into account where applicable indemnification arrangements concerning suppliers and insurers) and the accrued amount, if any, thereof, and adjusts the amount as appropriate. The Company has recorded immaterial accruals with respect to certain matters described below, in addition to other immaterial accruals for matters not described below. If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual, but will continue to monitor the matter for developments that will make the loss contingency both probable and reasonably estimable. In each case, there is a reasonable possibility that a loss may be incurred, including a loss in excess of the applicable accrual. For matters where no accrual has been recorded, the possible loss or range of loss (including any loss in excess of the accrual) cannot, in the Company's view, be reasonably estimated because, among other things: (i) the remedies or penalties sought are indeterminate or unspecified; (ii) the legal and/or factual theories are not well developed; and/or (iii) the matters involve complex or novel legal theories or a large number of parties.
The Company is a defendant in an action commenced in July 2013 under the California Labor Code Private Attorneys General Act (PAGA) alleging violation of California Wage Order 7-2001 for failing to provide seating to employees who work at entrance and exit doors in California warehouses. Canela v. Costco Wholesale Corp. (Case No. 2013-1-CV-248813; Santa Clara Superior Court). The complaint seeks relief under the California Labor Code, including civil penalties and attorneys’ fees. The Company filed an answer denying the material allegations of the complaint. A bench trial was held in June and July; no decision has been issued.
In June 2022, a business center employee raised similar claims alleging failure to provide seating to employees who work at membership refund desks in California warehouses and business centers. Rodriguez v. Costco Wholesale Corp. (Case No. 22CV012847; Alameda Superior Court). The complaint seeks relief under the California Labor Code, including civil penalties and attorneys' fees. The Company filed an answer denying the material allegations of the complaint.
In December 2018, a depot employee raised similar claims, alleging that depot employees in California did not receive suitable seating or reasonably comfortable workplace temperature conditions. Lane v. Costco Wholesale Corp. (Case No. CIVDS 1908816; San Bernardino Superior Court). The Company filed an answer denying the material allegations of the complaint. In October 2019, the parties settled for an immaterial amount the seating claims on a representative basis, which received court approval in
February 2020. The parties settled the temperature claims for an immaterial amount in April 2022, and court approval was received in May 2022.
In March 2019, employees filed a class action against the Company alleging claims under California law for failure to pay overtime, to provide meal and rest periods and itemized wage statements, to timely pay wages due to terminating employees, to pay minimum wages, and for unfair business practices. Relief is sought under the California Labor Code, including civil penalties and attorneys' fees. Nevarez v. Costco Wholesale Corp. (Case No. 2:19-cv-03454; C.D. Cal.). The Company filed an answer denying the material allegations of the complaint. In December 2019, the court issued an order denying class certification. In January 2020, the plaintiffs dismissed their Labor Code claims without prejudice, and the court remanded the action to state court. Settlement for an immaterial amount was agreed upon in February 2021. Final court approval of the settlement was granted on May 3, 2022. A proposed intervenor has appealed the denial of her motion to intervene.
In May 2019, an employee filed a class action against the Company alleging claims under California law for failure to pay overtime, to provide itemized wage statements, to timely pay wages due to terminating employees, to pay minimum wages, and for unfair business practices. Rough v. Costco Wholesale Corp. (Case No. 2:19-cv-01340; E.D. Cal.). Relief is sought under the California Labor Code, including civil penalties and attorneys' fees. In September 2021, the court granted Costco’s motion for partial summary judgment and denied class certification. In August 2019, the plaintiff filed a companion case in state court seeking penalties under PAGA. Rough v. Costco Wholesale Corp. (Case No. FCS053454; Sonoma County Superior Court). Relief is sought under the California Labor Code, including civil penalties and attorneys' fees. The state court action has been stayed pending resolution of the federal action.
In December 2020, a former employee filed suit against the Company asserting collective and class claims on behalf of non-exempt employees under the Fair Labor Standards Act and New York Labor Law for failure to pay for all hours worked, failure to pay certain non-exempt employees on a weekly basis, and failure to provide proper wage statements and notices. The plaintiff also asserted individual retaliation claims. Cappadora v. Costco Wholesale Corp. (Case No. 1:20-cv-06067; E.D.N.Y.). An amended complaint was filed, and the Company denied the material allegations of the amended complaint. Based on an agreement in principle concerning settlement of the matter, involving a proposed payment by the Company of an immaterial amount, the federal action has been dismissed. In April 2022, Cappadora and a second plaintiff filed an action against the Company in New York state court asserting the same class claims asserted in the federal action under the New York Labor Law and seeking preliminary approval of the class settlement. Cappadora and Sancho v. Costco Wholesale Corp. (Index No. 604757/2022; Nassau County Supreme Court).
In August 2021, a former employee filed a similar suit, asserting class claims on behalf of certain non-exempt employees under New York Labor Law for failure to pay on a weekly basis. Umadat v. Costco Wholesale Corp. (Case No. 2:21-cv-4814; E.D.N.Y.). The Company answered the complaint on October 21, 2021, denying the material allegations. In April 2022, a former employee filed a similar suit, asserting class claims on behalf of certain non-exempt employees under New York Labor Law, as well as under the Fair Labor Standards Act, for failure to pay on a weekly basis and failure to pay overtime. Burian v. Costco Wholesale Corp. (Case No. 2:22-cv-02108; E.D.N.Y.).
In February 2021, a former employee filed a class action against the Company alleging violations of California Labor Code regarding payment of wages, meal and rest periods, wage statements, reimbursement of expenses, payment of final wages to terminated employees, and for unfair business practices. Edwards v. Costco Wholesale Corp. (Case No. 5:21-cv-00716: C.D. Cal.). In May 2021, the Company filed a motion to dismiss the complaint, which was granted with leave to amend. In June 2021, the plaintiff filed an amended complaint, which the Company moved to dismiss later that month. The court granted the motion in part in July 2021 with leave to amend. In August 2021, the plaintiff filed a second amended complaint and filed a separate representative action under PAGA asserting the same Labor Code claims and seeking civil penalties and attorneys' fees. The Company filed an answer to the second
amended class action complaint, denying the material allegations. The Company also filed an answer to the PAGA representative action, denying the material allegations.
In July 2021, a former temporary staffing employee filed a class action against the Company and a staffing company alleging violations of the California Labor Code regarding payment of wages, meal and rest periods, wage statements, the timeliness of wages and final wages, and for unfair business practices. Dimas v. Costco Wholesale Corp. (Case No. STK-CV-UOE-2021-0006024; San Joaquin Superior Court). The Company has moved to compel arbitration of the plaintiff's individual claims and to dismiss the class action complaint. On September 7, 2021, the same former employee filed a separate representative action under PAGA asserting the same Labor Code violations and seeking civil penalties and attorneys' fees. The case has been stayed pending the motion to compel in the related case.
In September 2021, an employee filed a class action against the Company alleging violations of the California Labor Code regarding the alleged failure to provide sick pay, failure to timely pay wages due at separation from employment, and for violations of California's unfair competition law. De Benning v. Costco Wholesale Corp. (Case No. 34-2021-00309030-CU-OE-GDS; Sacramento Superior Court). The Company answered the complaint in January 2022, denying its material allegations. In April 2022, a settlement for an immaterial amount was agreed upon, subject to court approval.
In March 2022, an employee filed a class action against the Company alleging violations of the California Labor Code regarding the failure to: pay wages, provide meal and rest periods, provide accurate wage statements, timely pay final wages, and reimburse business expenses. Diaz v. Costco Wholesale Corp. (Case No. 22STCV09513; Los Angeles Superior Court). The Company filed an answer denying the material allegations.
In May 2022, an employee filed a PAGA-only representative action against the Company alleging claims under the California Labor Code regarding the payment of wages, meal and rest periods, the timeliness of wages and final wages, wage statements, accurate records and business expenses. Gonzalez v. Costco Wholesale Corp. (Case No. 22AHCV00255; Los Angeles Superior Court).
Beginning in December 2017, the United States Judicial Panel on Multidistrict Litigation consolidated numerous cases concerning the impacts of opioid abuses filed against various defendants by counties, cities, hospitals, Native American tribes, third-party payors, and others. In re National Prescription Opiate Litigation (MDL No. 2804) (N.D. Ohio). Included are cases that name the Company, including actions filed by counties and cities in Michigan, New Jersey, Oregon, Virginia and South Carolina, a third-party payor in Ohio, and a hospital in Texas, class actions filed on behalf of infants born with opioid-related medical conditions in 40 states, and class actions and individual actions filed on behalf of individuals seeking to recover alleged increased insurance costs associated with opioid abuse in 43 states and American Samoa. Claims against the Company in state courts in New Jersey, Oklahoma, Utah, and Arizona have been dismissed. The Company is defending all of the pending matters.
Members of the Board of Directors, six corporate officers and the Company are defendants in a shareholder derivative action related to chicken welfare and alleged breaches of fiduciary duties. Smith, et ano. v. Vachris, et al., Superior Court of the State of Washington, County of King, No, 22-2-08937-7SEA, (filed 6/14/22, as amended, 6/30/22); The complaint seeks from the individual defendants damages, injunctive relief, costs, and attorneys' fees. A motion to dismiss the amended complaint has been filed.
The Company does not believe that any pending claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows; it is possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a charge that might be material to the results of an individual fiscal quarter or year.
v3.22.2.2
Segment Reporting
 12 Months Ended
Aug. 28, 2022
Segment Reporting [Abstract]  
Segment Reporting
Note 11—Segment Reporting
The Company is principally engaged in the operation of membership warehouses through wholly owned subsidiaries in the U.S., Canada, Mexico, Japan, U.K., Korea, Taiwan, Australia, Spain, France, China, and Iceland. Reportable segments are largely based on management’s organization of the operating segments for operational decisions and assessments of financial performance, which considers geographic locations. The material accounting policies of the segments are as described in Note 1. Inter-segment net sales and expenses have been eliminated in computing total revenue and operating income. Effective for fiscal 2022, stock-based compensation was allocated to the segments in this reporting. This change reflected a decision to evaluate the financial performance of the segments inclusive of this expense. Operating income was restated in each of the segments for all prior periods to reflect this change.
The following table provides information for the Company's reportable segments:
United StatesCanadaOther
International		Total
2022
Total revenue$165,294 $31,675 $29,985 $226,954 
Operating income5,268 1,346 1,179 7,793 
Depreciation and amortization1,436 180 284 1,900 
Additions to property and equipment2,795 388 708 3,891 
Property and equipment, net17,205 2,459 4,982 24,646 
Total assets44,904 6,558 12,704 64,166 
2021
Total revenue$141,398 $27,298 $27,233 $195,929 
Operating income4,470 1,093 1,145 6,708 
Depreciation and amortization1,339 177 265 1,781 
Additions to property and equipment2,612 272 704 3,588 
Property and equipment, net15,993 2,317 5,182 23,492 
Total assets39,589 5,962 13,717 59,268 
2020
Total revenue$122,142 $22,434 $22,185 $166,761 
Operating income3,822 778 835 5,435 
Depreciation and amortization1,248 155 242 1,645 
Additions to property and equipment2,060 258 492 2,810 
Property and equipment, net14,916 2,172 4,719 21,807 
Total assets38,366 5,270 11,920 55,556 
Disaggregated Revenue
The following table summarizes net sales by merchandise category; sales from e-commerce websites and business centers have been allocated to the applicable merchandise categories:
202220212020
Foods and Sundries
$85,629 $77,277 $68,659 
Non-Foods
61,100 55,966 44,807 
Fresh Foods
29,527 27,183 23,204 
Warehouse Ancillary and Other Businesses
46,474 31,626 26,550 
     Total net sales
$222,730 $192,052 $163,220 
v3.22.2.2
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Aug. 28, 2022
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
The consolidated financial statements include the accounts of Costco, its wholly-owned subsidiaries, and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in consolidation. During 2022, the Company paid a cash dividend of $208 and purchased the equity interest of its Taiwan operations from its former joint-venture partner for $842, totaling $1,050 in the aggregate. The remaining noncontrolling interest represents the portion of equity interests in a consolidated joint venture that is not 100% owned by the Company. Unless otherwise noted, references to net income relate to net income attributable to Costco.
Fiscal Year End Fiscal Year EndThe Company operates on a 52/53-week fiscal year basis with the year ending on the Sunday closest to August 31. References to 2022, 2021, and 2020 relate to the 52-week fiscal years ended August 28, 2022, August 29, 2021, and August 30, 2020, respectively.
Use of Estimates
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable. Actual results could differ from those estimates and assumptions.
Reclassification
Reclassification
Reclassifications were made to our 2021 and 2020 consolidated statements of income and cash flows to conform with current year presentation.
Cash and Cash Equivalents
Cash and Cash Equivalents
The Company considers as cash and cash equivalents all cash on deposit, highly liquid investments with a maturity of three months or less at the date of purchase, and proceeds due from credit and debit card transactions with settlement terms of up to four days. Credit and debit card receivables were $2,010 and $1,816 at the end of 2022 and 2021.
The Company provides for the daily replenishment of major bank accounts as payments are presented. Included in accounts payable at the end of 2022 and 2021, are $995 and $999 representing the excess of outstanding payments over cash on deposit at the banks on which the payments were drawn.
Short-Term Investments
Short-Term Investments
Short-term investments generally consist of debt securities (U.S. Government and Agency Notes), with maturities at the date of purchase of three months to five years. Investments with maturities beyond five years may be classified, based on the Company’s determination, as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Short-term investments classified as available-for-sale are recorded at fair value using the specific identification method with the unrealized gains and losses reflected in accumulated other comprehensive income (loss) until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis and are recorded in interest income and other, net in the consolidated statements of income. These available-for-sale investments have a low level of inherent credit risk given they are issued by the U.S. Government and Agencies. Changes in their fair value are primarily attributable to changes in interest rates and market liquidity. Short-term investments classified as held-to-maturity are financial instruments that the Company has the intent and ability to hold to maturity and are reported net of any related amortization and are not remeasured to fair value on a recurring basis.
The Company periodically evaluates unrealized losses in its investment securities for credit impairment, using both qualitative and quantitative criteria. In the event a security is deemed to be impaired as the result of a credit loss, the Company recognizes the loss in interest income and other, net in the consolidated statements of income.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
The Company accounts for certain assets and liabilities at fair value. The carrying value of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable, approximate fair value due to their short-term nature or variable interest rates. See Notes 2, 3, and 4 for the carrying value and fair value of the Company’s investments, derivative instruments, and fixed-rate debt, respectively.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying a fair value hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs are:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market
data.
Level 3: Significant unobservable inputs that are not corroborated by market data.
The Company’s valuation techniques used to measure the fair value of money market mutual funds are based on quoted market prices, such as quoted net asset values published by the fund as supported in an active market. Valuation methodologies used to measure the fair value of all other non-derivative financial instruments are based on independent external valuation information. The pricing process uses data from a variety of independent external valuation information providers, including trades, bid price or spread, two-sided markets, quotes, benchmark curves including but not limited to treasury benchmarks and LIBOR or Secured Overnight Financing Rate and swap curves, discount rates, and market data feeds. All are observable in the market or can be derived principally from or corroborated by observable market data. The Company reports transfers in and out of Levels 1, 2, and 3, as applicable, using the fair
value of the individual securities as of the beginning of the reporting period in which the transfer(s) occurred.
Current financial liabilities have fair values that approximate their carrying values. Long-term financial liabilities include the Company's long-term debt, which are recorded on the balance sheet at issuance price and adjusted for unamortized discounts or premiums and debt issuance costs, and are being amortized to interest expense over the term of the loan. The estimated fair value of the Company's long-term debt is based primarily on reported market values, recently completed market transactions, and estimates based upon interest rates, maturities, and credit.
Receivables, Net
Receivables, Net
Receivables consist primarily of vendor, credit card incentive, reinsurance, third-party pharmacy and other receivables. Vendor receivables include discounts and volume rebates. Balances are generally presented on a gross basis, separate from any related payable due. In certain circumstances, these receivables may be settled against the related payable to that vendor, in which case the receivables are presented on a net basis. Credit card incentive receivables primarily represent amounts earned under the co-branded credit card arrangements in the U.S. and Canada. Reinsurance receivables are held by the Company’s wholly-owned captive insurance subsidiary and primarily represent amounts ceded through reinsurance arrangements gross of the amounts assumed under reinsurance, which are presented within other current liabilities in the consolidated balance sheets. Third-party pharmacy receivables generally relate to amounts due from members’ insurers. Other receivables primarily consist of amounts due from governmental entities, mostly tax-related items.
The valuation allowance related to receivables was not material to our consolidated financial statements at the end of 2022, 2021, and 2020.
Merchandise Inventories
Merchandise Inventories
Merchandise inventories consist of the following:
20222021
United States $13,160 $10,248 
Canada1,966 1,456 
Other International2,781 2,511 
Merchandise inventories$17,907 $14,215 
Merchandise inventories are stated at the lower of cost or market. U.S. merchandise inventories are valued by the cost method of accounting, using the last-in, first-out (LIFO) basis. The Company believes the LIFO method more fairly presents the results of operations by more closely matching current costs with current revenues. The Company records an adjustment each quarter, if necessary, for the projected annual effect of inflation or deflation, and these estimates are adjusted to actual results determined at year-end, after actual inflation or deflation rates and inventory levels have been determined. Due to inflation, a $438 charge was recorded during 2022 to merchandise costs to increase the cumulative LIFO valuation on merchandise inventories at August 28, 2022. An immaterial LIFO charge was recorded in 2021. Canadian and Other International merchandise inventories are predominantly valued using the cost and retail inventory methods, respectively, using the first-in, first-out (FIFO) basis.
The Company provides for estimated inventory losses between physical inventory counts using estimates based on experience. The provision is adjusted periodically to reflect physical inventory counts, which generally occur in the second and fourth fiscal quarters. Inventory cost, where appropriate, is reduced by estimates of vendor rebates when earned or as the Company progresses towards earning those rebates, provided that they are probable and reasonably estimable.
Property and Equipment
Property and Equipment, Net
Property and equipment are stated at cost. Depreciation and amortization expense is computed primarily using the straight-line method over estimated useful lives. Leasehold improvements made after the beginning of the initial lease term are depreciated over the shorter of the estimated useful life of the asset or the remaining term of the initial lease plus any renewals that are reasonably certain at the date the leasehold improvements are made.
The Company capitalizes certain computer software and costs incurred in developing or obtaining software for internal use. During development, these costs are included in construction in progress. To the extent that the assets become ready for their intended use, these costs are included in equipment and fixtures and amortized on a straight-line basis over their estimated useful lives. In 2022 and 2021, the Company recognized in SG&A expenses write-offs of $118 and $84 for certain information technology assets.
Repair and maintenance costs are expensed when incurred. Expenditures for remodels, refurbishments and improvements that add to or change asset function or useful life are capitalized. Assets removed during the remodel, refurbishment or improvement are retired. Assets classified as held-for-sale at the end of 2022 and 2021 were immaterial.
The following table summarizes the Company's property and equipment balances at the end of 2022 and 2021:
Estimated Useful Lives20222021
LandN/A$7,955 $7,507 
Buildings and improvements
5-50 years
20,120 19,139 
Equipment and fixtures
3-20 years
10,275 9,505 
Construction in progressN/A1,582 1,507 
39,932 37,658 
Accumulated depreciation and amortization(15,286)(14,166)
Property and equipment, net$24,646 $23,492 
The Company evaluates long-lived assets for impairment on an annual basis, when relocating or closing a facility, or when events or changes in circumstances may indicate the carrying amount of the asset group, generally an individual warehouse, may not be fully recoverable. For asset groups held and used, including warehouses to be relocated, the carrying value of the asset group is considered recoverable when the estimated future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment loss is recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. For asset groups classified as held-for-sale (disposal group), the carrying value is compared to the disposal group’s fair value less costs to sell. The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques. There were no impairment charges recognized in 2022 or 2020. Impairment charges recognized in 2021 were immaterial.
Leases
Leases
The Company leases land, buildings, and/or equipment at warehouses and certain other office and distribution facilities. Leases generally contain one or more of the following options, which the Company can exercise at the end of the initial term: (a) renew the lease for a defined number of years at the then-fair market rental rate or rate stipulated in the lease agreement; (b) purchase the property at the then-fair market value; or (c) a right of first refusal in the event of a third-party offer.
Some leases include free-rent periods and step-rent provisions, which are recognized on a straight-line basis over the original term of the lease and any extension options that the Company is reasonably certain to exercise from the date the Company has control of the property. Certain leases provide for periodic rent increases based on price indices or the greater of minimum guaranteed amounts or sales volume. Our leases do not contain any material residual value guarantees or material restrictive covenants.
The Company determines at inception whether a contract is or contains a lease. Non-lease components and the lease components to which they relate are accounted for together as a single lease component for all asset classes. The Company initially records right-of-use (ROU) assets and lease obligations for its finance and operating leases based on the discounted future minimum lease payments over the term. The lease term is defined as the noncancelable period of the lease plus any options to extend when it is reasonably certain that the Company will exercise the option. As the rate implicit in the Company's leases is not easily determinable, the present value of the sum of the lease payments is calculated using the Company's incremental borrowing rate. The rate is determined using a portfolio approach based on the rate of interest the Company would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses quoted interest rates from financial institutions to derive the incremental borrowing rate. Impairment of ROU assets is evaluated in a similar manner as described in Property and Equipment, net above.
The Company's asset retirement obligations (ARO) primarily relate to leasehold improvements that must be removed at the end of a lease. These obligations are generally recorded as a discounted liability, with an offsetting asset at the inception of the lease term, based upon the estimated fair value of the costs to remove the improvements. These liabilities are accreted over time to the projected future value of the obligation. The ARO assets are depreciated using the same depreciation method as the leasehold improvement assets and are included with buildings and improvements. Estimated ARO liabilities associated with these leases are included in other liabilities in the accompanying consolidated balance sheet.
Goodwill and Intangible Assets, Goodwill, Policy
Goodwill and Acquired Intangible Assets
Goodwill represents the excess of acquisition cost over the fair value of the net assets acquired and is not subject to amortization. The Company reviews goodwill annually in the fourth quarter for impairment or when circumstances indicate carrying value may exceed the fair value. This evaluation is performed at the reporting unit level. If a qualitative assessment indicates that it is more likely than not that the fair value is less than carrying value, a quantitative analysis is completed using either the income or market approach, or a combination of both. The income approach estimates fair value based on expected discounted future cash flows, while the market approach uses comparable public companies and transactions to develop metrics to be applied to historical and expected future operating results.
Goodwill is included in other long-term assets in the consolidated balance sheets. The following table summarizes goodwill by reportable segment:
United States Canada Other International Total
Balance at August 30, 2020$947 $27 $14 $988 
Changes in currency translation and other (1)
6 1 1 8 
Balance at August 29, 2021$953 $28 $15 $996 
Changes in currency translation— (1)(2)(3)
Balance at August 28, 2022$953 $27 $13 $993 
____________
(1)Other consists of changes to the purchase price allocation.
Definite-lived intangible assets, which are not material, are included in other long-term assets on the consolidated balance sheets and are amortized on a straight-line basis over their estimated lives, which approximates the pattern of expected economic benefit.
Insurance / Self-Insurance Liabilities
Insurance/Self-insurance Liabilities
Claims for employee health care benefits, workers’ compensation, general liability, property damage, directors’ and officers’ liability, vehicle liability, inventory loss, and other exposures are funded predominantly through self-insurance. Insurance coverage is maintained for certain risks to limit exposures arising from very large losses. The Company uses different risk management mechanisms, including a wholly-owned captive insurance subsidiary (the captive) and participates in a reinsurance program. Liabilities associated with the risks that are retained by the Company are not discounted and are estimated, in part, by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. At the end of 2022 and 2021, these insurance liabilities were $1,364 and $1,257 in the aggregate, respectively, and were included in accrued salaries and benefits and other current liabilities in the consolidated balance sheets, classified based on their nature.
The captive receives direct premiums, which are netted against the Company’s premium costs in selling, general and administrative expenses, in the consolidated statements of income. The captive participates in a reinsurance program that includes other third-party participants. The reinsurance agreement is one year in duration, and new agreements are entered into by each participant at their discretion at the commencement of the next calendar year. The participant agreements and practices of the reinsurance program are designed to limit a participating members’ individual risk. Income statement adjustments related to the reinsurance program and related impacts to the consolidated balance sheets are recognized as information becomes known. In the event the Company leaves the reinsurance program, the Company retains its primary obligation to the policyholders for prior activity.
Derivatives
Derivatives
The Company is exposed to foreign-currency exchange-rate fluctuations in the normal course of business. It manages these fluctuations, in part, through the use of forward foreign-exchange contracts, seeking to economically hedge the impact of fluctuations of foreign exchange on known future expenditures denominated in a non-functional foreign-currency. The contracts relate primarily to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries with functional currencies other than the U.S. dollar. Currently, these contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate risk with the use of these contracts and does not intend to engage in speculative transactions. Some of these contracts contain credit-risk-related contingent features that require settlement of outstanding contracts upon certain triggering events. The aggregate fair value amounts of derivative instruments in a net liability position and the amount needed to settle the instruments immediately if the credit-risk-related contingent features were triggered were immaterial at the end of 2022. There were no derivative instruments in a net liability position at the end of 2021. The aggregate notional amounts of open, unsettled forward foreign-exchange contracts were $1,242 and $1,331 at the end of 2022 and 2021, respectively. See Note 3 for information on the fair value of unsettled forward foreign-exchange contracts at the end of 2022 and 2021.
The unrealized gains or losses recognized in interest income and other, net in the accompanying consolidated statements of income relating to the net changes in the fair value of unsettled forward foreign-exchange contracts were immaterial in 2022, 2021 and 2020.
The Company is exposed to fluctuations in prices for energy, particularly electricity and natural gas, and other commodity products used in retail and manufacturing operations, which it seeks to partially mitigate through the use of fixed-price contracts for certain of its warehouses and other facilities, primarily in the U.S. and Canada. The Company also enters into variable-priced contracts for some purchases of natural gas, in addition to fuel for its gas stations, on an index basis. These contracts meet the characteristics of
derivative instruments, but generally qualify for the “normal purchases and normal sales” exception under authoritative guidance and require no mark-to-market adjustment.
Foreign Currency
Foreign Currency
The functional currencies of the Company’s international subsidiaries are their local currencies. Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Translation adjustments are recorded in accumulated other comprehensive loss. Revenues and expenses of the Company’s consolidated foreign operations are translated at average exchange rates prevailing during the year.
The Company recognizes foreign-currency transaction gains and losses related to revaluing or settling monetary assets and liabilities denominated in currencies other than the functional currency in interest income and other, net in the consolidated statements of income. Generally, these include the U.S. dollar cash and cash equivalents and the U.S. dollar payables of consolidated subsidiaries revalued to their functional currency. Also included are realized foreign-currency gains or losses from settlements of forward foreign-exchange contracts. These items were $84 in 2022 and immaterial in 2021 and 2020.
Revenue Recognition
Revenue Recognition
The Company recognizes sales for the amount of consideration collected from the member, which includes gross shipping fees where applicable, and is net of sales taxes collected and remitted to government agencies and member returns. The Company reserves for estimated returns based on historical trends in merchandise returns and reduces sales and merchandise costs accordingly. The Company records, on a gross basis, a refund liability and an asset for recovery, which are included in other current liabilities and other current assets, respectively, in the consolidated balance sheets.
The Company offers merchandise in the following core merchandise categories: foods and sundries, non-foods, and fresh foods. The Company also provides expanded products and services through warehouse ancillary and other businesses. The majority of revenue from merchandise sales is recognized at the point of sale. Revenue generated through e-commerce or special orders is generally recognized upon shipment to the member. For merchandise shipped directly to the member, shipping and handling costs are expensed as incurred as fulfillment costs and included in merchandise costs in the consolidated statements of income. In certain ancillary businesses, revenue is deferred until the member picks up merchandise at the warehouse. Deferred sales are included in other current liabilities in the consolidated balance sheets.
The Company is the principal for the majority of its transactions and recognizes revenue on a gross basis. The Company is the principal when it has control of the merchandise or service before it is transferred to the member, which generally is established when Costco is primarily responsible for merchandising decisions, pricing discretion, and maintains the relationship with the member, including assurance of member service and satisfaction.
The Company accounts for membership fee revenue, net of refunds, on a deferred basis, ratably over the one-year membership period. Deferred membership fees at the end of 2022 and 2021 were $2,174 and $2,042, respectively.
In most countries, the Company's Executive members qualify for a 2% reward on qualified purchases, subject to an annual maximum value, which does not expire and is redeemable at Costco warehouses. The Company accounts for this reward as a reduction in sales, net of the estimated impact of non-redemptions (breakage), with the corresponding liability classified as accrued member rewards in the consolidated balance sheets. Estimated breakage is computed based on redemption data. For 2022, 2021, and 2020, the net reduction in sales was $2,307, $2,047, and $1,707 respectively.
The Company sells and otherwise provides proprietary shop cards that do not expire and are redeemable at the warehouse or online for merchandise or membership. Revenue from shop cards is recognized upon redemption, and estimated breakage is recognized based on redemption data. The Company accounts for outstanding shop card balances as a shop card liability, net of estimated breakage. Shop card liabilities are included in other current liabilities in the consolidated balance sheets.
Citibank, N.A. became the exclusive issuer of co-branded credit cards to U.S. members in June 2016. The Company receives various forms of consideration from Citibank, including a royalty on purchases made on the card outside of Costco. A portion of the royalty is used to fund the rebate that cardholders receive, after taking into consideration breakage, which is calculated based on rebate redemption data. The rebates are issued in February and expire on December 31. The Company also maintains co-branded credit card arrangements in Canada and certain other International subsidiaries.
Merchandise Costs
Merchandise Costs
Merchandise costs consist of the purchase price or manufacturing costs of inventory sold, inbound and outbound shipping charges and all costs related to the Company’s depot, fulfillment and manufacturing operations, including freight from depots to selling warehouses, and are reduced by vendor consideration. Merchandise costs also include salaries, benefits, depreciation, and utilities in fresh foods and certain ancillary departments.
Vendor Allowances
Vendor Consideration
The Company has agreements to receive funds from vendors for discounts and a variety of other programs. These programs are evidenced by signed agreements that are reflected in the carrying value of the inventory when earned or as the Company progresses towards earning the rebate or discount, and as a component of merchandise costs as the merchandise is sold. Other vendor consideration is generally recorded as a reduction of merchandise costs upon completion of contractual milestones, terms of the related agreement, or by another systematic approach.
Selling, General and Administrative Expenses
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries, benefits and workers’ compensation costs for warehouse employees (other than fresh foods departments and certain ancillary businesses which are reflected in merchandise costs) as well as all regional and home office employees, including buying personnel. Selling, general and administrative expenses also include substantially all building and equipment depreciation, stock compensation expense, credit and debit card processing fees, utilities, preopening, as well as other operating costs incurred to support warehouse and e-commerce website operations.
Retirement Plans
Retirement Plans
The Company's 401(k) retirement plan is available to all U.S. employees over the age of 18 who have completed 90 days of employment. The plan allows participants to make wage deferral contributions, a portion of which the Company matches. In addition, the Company provides each eligible participant an annual discretionary contribution. The Company also has a defined contribution plan for employees in Canada and contributes a percentage of each employee's wages. Certain subsidiaries in the Company's Other International operations have defined benefit and defined contribution plans, which are not material. Amounts expensed under all plans were $824, $748, and $676 for 2022, 2021, and 2020, and are predominantly included in SG&A expenses in the consolidated statements of income.
Stock-Based Compensation
Stock-Based Compensation
Restricted Stock Units (RSUs) granted to employees generally vest over five years and allow for quarterly vesting of the pro-rata number of stock-based awards that would vest on the next anniversary of the grant date in the event of retirement or voluntary termination. Actual forfeitures are recognized as they occur.
Compensation expense for stock-based awards is predominantly recognized using the straight-line method over the requisite service period for the entire award. Awards for employees and non-employee directors provide for accelerated vesting based on cumulative years of service with the Company. Compensation expense for the accelerated shares is recognized upon achievement of the long-service term. The cumulative amount of compensation cost recognized at any point in time equals at least the portion of the grant-date fair value of the award that is vested at that date. The fair value of RSUs is calculated as the market value of the common stock on the measurement date less the present value of the expected dividends forgone during the vesting period.
Stock-based compensation expense is predominantly included in SG&A expenses in the consolidated statements of income. Certain stock-based compensation costs are capitalized or included in the cost of merchandise. See Note 7 for additional information on the Company’s stock-based compensation plans.
Income Taxes
Income Taxes
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts that are more likely than not expected to be realized.
The timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions requires significant judgment. The benefits of uncertain tax positions are recorded in the Company’s consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge from tax authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes as appropriate.
Net Income per Common Share Attributable to Costco
Net Income per Common Share Attributable to Costco
The computation of basic net income per share uses the weighted average number of shares that were outstanding during the period. The computation of diluted net income per share uses the weighted average number of shares in the basic net income per share calculation plus the number of common shares that would be issued assuming vesting of all potentially dilutive common shares outstanding using the treasury stock method for shares subject to RSUs.
Stock Repurchase Programs
Stock Repurchase Programs
Repurchased shares of common stock are retired, in accordance with the Washington Business Corporation Act. The par value of repurchased shares is deducted from common stock and the excess repurchase price over par value is deducted by allocation to additional paid-in capital and retained earnings. The amount allocated to additional paid-in capital is the current value of additional paid-in capital per share outstanding and is applied to the number of shares repurchased. Any remaining amount is allocated to retained earnings. See Note 6 for additional information.
v3.22.2.2
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Aug. 28, 2022
Accounting Policies [Abstract]  
Schedule of Merchandise Inventories
Merchandise inventories consist of the following:
20222021
United States $13,160 $10,248 
Canada1,966 1,456 
Other International2,781 2,511 
Merchandise inventories$17,907 $14,215 
Property, Plant and Equipment
The following table summarizes the Company's property and equipment balances at the end of 2022 and 2021:
Estimated Useful Lives20222021
LandN/A$7,955 $7,507 
Buildings and improvements
5-50 years
20,120 19,139 
Equipment and fixtures
3-20 years
10,275 9,505 
Construction in progressN/A1,582 1,507 
39,932 37,658 
Accumulated depreciation and amortization(15,286)(14,166)
Property and equipment, net$24,646 $23,492 
Schedule of Goodwill The following table summarizes goodwill by reportable segment:
United States Canada Other International Total
Balance at August 30, 2020$947 $27 $14 $988 
Changes in currency translation and other (1)
6 1 1 8 
Balance at August 29, 2021$953 $28 $15 $996 
Changes in currency translation— (1)(2)(3)
Balance at August 28, 2022$953 $27 $13 $993 
____________
(1)Other consists of changes to the purchase price allocation.
v3.22.2.2
Investments (Tables)
 12 Months Ended
Aug. 28, 2022
Investments, Debt and Equity Securities [Abstract]  
Available for Sale and Held to Maturity Investments
The Company’s investments were as follows:
2022:Cost
Basis		Unrealized
Losses, Net		Recorded
Basis
Available-for-sale:
Government and agency securities$534 $(5)$529 
Held-to-maturity:
Certificates of deposit317 — 317 
Total short-term investments$851 $(5)$846 
2021:Cost
Basis		Unrealized
Gains, Net		Recorded
Basis
Available-for-sale:
Government and agency securities$375 $6 $381 
Held-to-maturity:
Certificates of deposit536 — 536 
Total short-term investments$911 $6 $917 
Maturities of Available for Sale and Held to Maturity Securities
The maturities of available-for-sale and held-to-maturity securities at the end of 2022 are as follows:
 Available-For-SaleHeld-To-Maturity
 Cost BasisFair Value
Due in one year or less$276 $274 $317 
Due after one year through five years197 195 — 
Due after five years6160— 
       Total$534 $529 $317 
v3.22.2.2
Fair Value Measurement (Tables)
 12 Months Ended
Aug. 28, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis
The table below presents information regarding the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis and indicate the level within the hierarchy reflecting the valuation techniques utilized to determine such fair value.
Level 2
20222021
Investment in government and agency securities(1)
$529 $393 
Forward foreign-exchange contracts, in asset position(2)
34 17 
Forward foreign-exchange contracts, in (liability) position(2)
(2)(2)
Total$561 $408 
 ____________
(1)At August 29, 2021, $12 cash and cash equivalents and $381 short-term investments are included in the consolidated balance sheets.
(2)The asset and the liability values are included in other current assets and other current liabilities, respectively, in the consolidated balance sheets.
v3.22.2.2
Debt (Tables)
 12 Months Ended
Aug. 28, 2022
Debt Disclosure [Abstract]  
Carrying Value of Company's Long-Term Debt The carrying value of long-term debt consisted of the following:
 20222021
2.300% Senior Notes due May 2022
$— $800 
2.750% Senior Notes due May 2024
1,000 1,000 
3.000% Senior Notes due May 2027
1,000 1,000 
1.375% Senior Notes due June 2027
1,250 1,250 
1.600% Senior Notes due April 2030
1,750 1,750 
1.750% Senior Notes due April 2032
1,000 1,000 
Other long-term debt590 731 
Total long-term debt6,590 7,531 
Less unamortized debt discounts and issuance costs33 40 
Less current portion(1)
73 799 
Long-term debt, excluding current portion$6,484 $6,692 
_______________
(1)Net of unamortized debt discounts and issuance costs.
Schedule of Maturities of Long-term Debt
Maturities of long-term debt during the next five fiscal years and thereafter are as follows: 
2023$73 
20241,088 
2025110 
202681 
20272,250 
Thereafter
2,988 
Total
$6,590 
v3.22.2.2
Leases (Tables)
 12 Months Ended
Aug. 28, 2022
Leases [Abstract]  
DisclosureofSupplementalBalanceSheetInformationRelatedtoLeases
The tables below present information regarding the Company's lease assets and liabilities.
20222021
Assets
Operating lease right-of-use assets$2,774 $2,890 
Finance lease assets(1)
1,620 1,000 
Total lease assets$4,394 $3,890 
Liabilities
Current
Operating lease liabilities(2)
$239 $222 
Finance lease liabilities(2)
245 72 
Long-term
Operating lease liabilities2,482 2,642 
Finance lease liabilities(3)
1,383 980 
Total lease liabilities$4,349 $3,916 
 _______________
(1)Included in other long-term assets in the consolidated balance sheets.
(2)Included in other current liabilities in the consolidated balance sheets.
(3)Included in other long-term liabilities in the consolidated balance sheets.
20222021
Weighted-average remaining lease term (years)
Operating leases
2021
Finance leases
1722
Weighted-average discount rate
Operating leases
2.26 %2.16 %
Finance leases
3.97 %4.91 %
Lease, Cost
The components of lease expense, excluding short-term lease costs and sublease income (which were not material), were as follows:
202220212020
Operating lease costs(1)
$297 $296 $252 
Finance lease costs:
Amortization of lease assets(1)
128 50 31 
Interest on lease liabilities(2)
45 37 33 
Variable lease costs(1)
157 151 87 
Total lease costs$627 $534 $403 
 _______________
(1)Included in selling, general and administrative expenses and merchandise costs in the consolidated statements of income.
(2)Included in interest expense and merchandise costs in the consolidated statements of income.
Schedule of Cash Flow, Supplemental Disclosures
Supplemental cash flow information related to leases was as follows:
202220212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows — operating leases
$277 $282 $258 
Operating cash flows — finance leases
45 37 33 
Financing cash flows — finance leases
176 67 49 
Operating lease assets obtained in exchange for new or modified leases231 350 354 
Financing lease assets obtained in exchange for new or modified leases794 399 317 
Lessee, Operating Lease, Liability, Maturity
As of August 28, 2022, future minimum payments during the next five fiscal years and thereafter are as follows:
Operating Leases(1)
Finance Leases
2023$277 $288 
2024256 253 
2025210 280 
2026207 119 
2027186 88 
Thereafter2,332 1,191 
Total(2)
3,468 2,219 
Less amount representing interest747 591 
Present value of lease liabilities$2,721 $1,628 
 _______________
(1)Operating lease payments have not been reduced by future sublease income of $83.
(2)Excludes $660 of lease payments for leases that have been signed but not commenced.
v3.22.2.2
Stockholders' Equity (Tables)
 12 Months Ended
Aug. 28, 2022
Stockholders' Equity Note [Abstract]  
Stock Repurchased Activity The following table summarizes the Company’s stock repurchase activity:
Shares
Repurchased
(000’s)		Average
Price per
Share		Total Cost
2022863 $511.46 $442 
20211,358 364.39 495 
2020643 308.45 198 
v3.22.2.2
Stock-Based Compensation Plans (Tables)
 12 Months Ended
Aug. 28, 2022
Share-Based Payment Arrangement [Abstract]  
Summary of RSU Transactions
The following table summarizes RSU transactions during 2022:
Number of
Units
(in 000’s)		Weighted-Average
Grant Date Fair
Value
Outstanding at the end of 20214,349 $257.88 
Granted1,679 476.06 
Vested and delivered(2,456)290.18 
Forfeited(123)332.84 
Outstanding at the end of 20223,449 $338.41 
Summary of Stock-Based Compensation Expense and Related Tax Benefits
The following table summarizes stock-based compensation expense and the related tax benefits:
202220212020
Stock-based compensation expense$724 $665 $619 
Less recognized income tax benefit
154 140 128 
Stock-based compensation expense, net$570 $525 $491 
v3.22.2.2
Income Taxes (Tables)
 12 Months Ended
Aug. 28, 2022
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign
Income before income taxes is comprised of the following:
202220212020
Domestic$5,759 $4,931 $4,204 
Foreign2,081 1,749 1,163 
Total$7,840 $6,680 $5,367 
Schedule of Components of Income Tax Expense (Benefit)
The provisions for income taxes are as follows:
202220212020
Federal:
Current$798 $718 $616 
Deferred(35)84 77 
Total federal763 802 693 
State:
Current333 265 230 
Deferred(5)11 8 
Total state328 276 238 
Foreign:
Current851 557 372 
Deferred(17)(34)5 
Total foreign834 523 377 
Total provision for income taxes$1,925 $1,601 $1,308 
Schedule of Effective Income Tax Rate Reconciliation
The reconciliation between the statutory tax rate and the effective rate for 2022, 2021, and 2020 is as follows:
 202220212020
Federal taxes at statutory rate$1,646 21.0 %$1,403 21.0 %$1,127 21.0 %
State taxes, net267 3.4 243 3.6 190 3.6 
Foreign taxes, net231 3.0 92 1.4 92 1.7 
Employee stock ownership plan (ESOP)(23)(0.3)(91)(1.3)(24)(0.5)
Other(196)(2.5)(46)(0.7)(77)(1.4)
Total$1,925 24.6 %$1,601 24.0 %$1,308 24.4 %
Schedule of Deferred Tax Assets and Liabilities
The components of the deferred tax assets (liabilities) are as follows:
20222021
Deferred tax assets:
Equity compensation$84 $72 
Deferred income/membership fees302 161 
Foreign tax credit carry forward201 146 
Operating lease liabilities727 769 
Accrued liabilities and reserves694 681 
Other5 62 
Total deferred tax assets2,013 1,891 
Valuation allowance(313)(214)
Total net deferred tax assets1,700 1,677 
Deferred tax liabilities:
Property and equipment(962)(935)
Merchandise inventories(231)(216)
Operating lease right-of-use assets(701)(744)
Foreign branch deferreds(85)(92)
Total deferred tax liabilities(1,979)(1,987)
       Net deferred tax liabilities$(279)$(310)
Schedule Of Gross Unrecognized Tax Benefits Table
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for 2022 and 2021 is as follows:
20222021
Gross unrecognized tax benefit at beginning of year$33 $30 
Gross increases—current year tax positions1 2 
Gross increases—tax positions in prior years12 2 
Gross decreases—tax positions in prior years(12)— 
Gross decreases—settlements(12)— 
Lapse of statute of limitations(6)(1)
Gross unrecognized tax benefit at end of year$16 $33 
v3.22.2.2
Net Income per Common and Common Equivalent Share Net Income per Common and Common Equivalent Share (Tables)
 12 Months Ended
Aug. 28, 2022
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
The following table shows the amounts used in computing net income per share and the weighted average number of shares of basic and of potentially dilutive common shares outstanding (shares in 000’s): 
202220212020
Net income attributable to Costco
$5,844 $5,007 $4,002 
Weighted average basic shares
443,651 443,089 442,297 
RSUs1,106 1,257 1,604 
Weighted average diluted shares
444,757 444,346 443,901 
v3.22.2.2
Segment Reporting (Tables)
 12 Months Ended
Aug. 28, 2022
Segment Reporting [Abstract]  
Segment Reporting Information, by Segment
The following table provides information for the Company's reportable segments:
United StatesCanadaOther
International		Total
2022
Total revenue$165,294 $31,675 $29,985 $226,954 
Operating income5,268 1,346 1,179 7,793 
Depreciation and amortization1,436 180 284 1,900 
Additions to property and equipment2,795 388 708 3,891 
Property and equipment, net17,205 2,459 4,982 24,646 
Total assets44,904 6,558 12,704 64,166 
2021
Total revenue$141,398 $27,298 $27,233 $195,929 
Operating income4,470 1,093 1,145 6,708 
Depreciation and amortization1,339 177 265 1,781 
Additions to property and equipment2,612 272 704 3,588 
Property and equipment, net15,993 2,317 5,182 23,492 
Total assets39,589 5,962 13,717 59,268 
2020
Total revenue$122,142 $22,434 $22,185 $166,761 
Operating income3,822 778 835 5,435 
Depreciation and amortization1,248 155 242 1,645 
Additions to property and equipment2,060 258 492 2,810 
Property and equipment, net14,916 2,172 4,719 21,807 
Total assets38,366 5,270 11,920 55,556 
Revenue from External Customers by Products and Services
The following table summarizes net sales by merchandise category; sales from e-commerce websites and business centers have been allocated to the applicable merchandise categories:
202220212020
Foods and Sundries
$85,629 $77,277 $68,659 
Non-Foods
61,100 55,966 44,807 
Fresh Foods
29,527 27,183 23,204 
Warehouse Ancillary and Other Businesses
46,474 31,626 26,550 
     Total net sales
$222,730 $192,052 $163,220 
v3.22.2.2
Accounting Policies - Additional Information (Details)
Aug. 28, 2022
warehouse
states
Entity Location [Line Items]  
Number of warehouses operated 838
UNITED STATES  
Entity Location [Line Items]  
Number of warehouses operated 578
Number of states in country | states 46
CANADA  
Entity Location [Line Items]  
Number of warehouses operated 107
MEXICO  
Entity Location [Line Items]  
Number of warehouses operated 40
UNITED KINGDOM  
Entity Location [Line Items]  
Number of warehouses operated 29
JAPAN  
Entity Location [Line Items]  
Number of warehouses operated 31
KOREA  
Entity Location [Line Items]  
Number of warehouses operated 17
TAIWAN  
Entity Location [Line Items]  
Number of warehouses operated 14
AUSTRALIA  
Entity Location [Line Items]  
Number of warehouses operated 13
SPAIN  
Entity Location [Line Items]  
Number of warehouses operated 4
ICELAND  
Entity Location [Line Items]  
Number of warehouses operated 1
FRANCE  
Entity Location [Line Items]  
Number of warehouses operated 2
CHINA  
Entity Location [Line Items]  
Number of warehouses operated 2
v3.22.2.2
Accounting Policies - Basis of Presentation (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Accounting Policies [Abstract]      
Dividend to noncontrolling interest $ 208 $ 0 $ 0
Acquisition of noncontrolling interest 842 $ 0 $ 0
Payments to Acquire Noncontrolling Interest $ 1,050    
v3.22.2.2
Accounting Policies - Cash and Cash Equivalents (Details) - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
Accounting Policies [Abstract]    
Credit and debit card receivables, at carrying value $ 2,010 $ 1,816
Bank Overdrafts $ 995 $ 999
v3.22.2.2
Accounting Policies - Merchandise Inventories (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Schedule of Inventory [Line Items]    
Merchandise inventories $ 17,907 $ 14,215
Inventory, LIFO Reserve, Period Charge (438)  
UNITED STATES    
Schedule of Inventory [Line Items]    
LIFO Inventory Amount 13,160 10,248
CANADA    
Schedule of Inventory [Line Items]    
FIFO Inventory Amount 1,966 1,456
Other International Operations    
Schedule of Inventory [Line Items]    
FIFO Inventory Amount $ 2,781 $ 2,511
v3.22.2.2
Accounting Policies - Property and Equipment, Net (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Property and Equipment, Net [Line Items]      
Land $ 7,955 $ 7,507  
Buildings and improvements 20,120 19,139  
Equipment and fixtures 10,275 9,505  
Construction in progress 1,582 1,507  
Gross property and equipment 39,932 37,658  
Accumulated Depreciation and Amortization (15,286) (14,166)  
Property and Equipment, net 24,646 23,492 $ 21,807
Impairment of Intangible Assets (Excluding Goodwill) $ 118 $ 84  
Building and Building Improvements [Member] | Minimum [Member]      
Property and Equipment, Net [Line Items]      
Property and Equipment, net, Estimated Useful Lives 5    
Building and Building Improvements [Member] | Maximum [Member]      
Property and Equipment, Net [Line Items]      
Property and Equipment, net, Estimated Useful Lives 50    
Furniture and Fixtures [Member] | Minimum [Member]      
Property and Equipment, Net [Line Items]      
Property and Equipment, net, Estimated Useful Lives 3    
Furniture and Fixtures [Member] | Maximum [Member]      
Property and Equipment, Net [Line Items]      
Property and Equipment, net, Estimated Useful Lives 20    
v3.22.2.2
Accounting Policies - Goodwill and Acquired Intangible Assets (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Goodwill [Line Items]      
Goodwill $ 993 $ 996 $ 988
Goodwill, Foreign Currency Translation Gain (Loss)   8  
Goodwill, Period Increase (Decrease) (3)    
Operating Segments | UNITED STATES      
Goodwill [Line Items]      
Goodwill 953 953 947
Goodwill, Purchase Accounting Adjustments 0 6  
Operating Segments | CANADA      
Goodwill [Line Items]      
Goodwill 27 28 27
Goodwill, Foreign Currency Translation Gain (Loss) (1) 1  
Operating Segments | Other International Operations      
Goodwill [Line Items]      
Goodwill 13 15 $ 14
Goodwill, Foreign Currency Translation Gain (Loss) $ (2) $ 1  
v3.22.2.2
Accounting Policies - Insurance/Self-Insurance Liabilities (Details) - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
Accounting Policies [Abstract]    
Accrued insurance $ 1,364 $ 1,257
v3.22.2.2
Accounting Policies - Derivatives (Details) - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
Forward foreign exchange contracts    
Derivative [Line Items]    
Derivative, Notional Amount $ 1,242 $ 1,331
v3.22.2.2
Accounting Policies - Foreign Currency (Details)
$ in Millions
 12 Months Ended
Aug. 28, 2022
USD ($)
Accounting Policies [Abstract]  
Foreign Currency Transaction Gain, before Tax $ 84
v3.22.2.2
Accounting Policies - Revenue Recognition (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Summary Of Significant Accounting Policies [Line Items]      
Deferred membership fees $ 2,174 $ 2,042  
Reduction in sales $ 2,307 $ 2,047 $ 1,707
v3.22.2.2
Accounting Policies - Retirement Plans (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Accounting Policies [Abstract]      
Minimum number of days of employment to qualify for retirement plan 90 days    
Defined contribution plan, cost recognized $ 824 $ 748 $ 676
v3.22.2.2
Accounting Policies - Stock-Based Compensation (Details)
 12 Months Ended
Aug. 28, 2022
Employees [Member]  
Summary Of Significant Accounting Policies [Line Items]  
Share-based compensation arrangement by share-based payment award, award vesting period 5 years
v3.22.2.2
Investments - Available for Sale and Held to Maturity Investments (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Available For Sale And Held To Maturity [Line Items]    
Available-for-sale, cost basis, total $ 534  
Debt Securities, Available-for-sale 529  
Held-to-maturity, cost basis 317  
Total investments, recorded basis 846 $ 917
Total investments, cost basis 851 911
Debt Securities, Unrealized Gain (Loss) (5) 6
US Government Agencies Debt Securities [Member]    
Available For Sale And Held To Maturity [Line Items]    
Available-for-sale, cost basis, total 534 375
Debt Securities, Available-for-sale 529 381
Debt Securities, Unrealized Gain (Loss) (5) 6
Certificates of Deposit [Member]    
Available For Sale And Held To Maturity [Line Items]    
Held-to-maturity, recorded basis 317 536
Held-to-maturity, cost basis $ 317 $ 536
v3.22.2.2
Investments - Maturities of Available for Sale and Held to Maturity Securities (Details)
$ in Millions
Aug. 28, 2022
USD ($)
Available-For-Sale, Cost Basis  
Due in one year or less $ 276
Due after one year through five years 197
Due after five years 61
Available-for-sale, cost basis, total 534
Available-For-Sale, Fair Value  
Due in one year or less 274
Due after one year through five years 195
Due after five years 60
Available-for-sale, recorded basis, total 529
Held-To-Maturity  
Due in one year or less 317
Due after one year through five years 0
Due after five years 0
Held-to-maturity, cost basis, total $ 317
v3.22.2.2
Fair Value Measurement - Fair Value of Financial Assets and Financial Liabilities Measured on Recurring Basis (Details) - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and Cash Equivalents, at Carrying Value $ 10,203 $ 11,258
Debt Securities, Available-for-sale 529  
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value of assets measured on recurring basis 561 408
Government and Agency Securities [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 529 381
Government and Agency Securities [Member] | Cash and Cash Equivalents [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and Cash Equivalents, at Carrying Value   12
Government and Agency Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value of assets measured on recurring basis [1] 529 393
Foreign Exchange Forward [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value of assets measured on recurring basis [2] 34 17
Fair value of liabilities measured on recurring basis [2] $ (2) $ (2)
[1] At August 29, 2021, $12 cash and cash equivalents and $381 short-term investments are included in the consolidated balance sheets.
[2] The asset and the liability values are included in other current assets and other current liabilities, respectively, in the consolidated balance sheets.
v3.22.2.2
Debt, Schedule Of Short-Term Debt (Details) - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
Debt Disclosure [Abstract]    
Line of credit facility, current borrowing capacity $ 1,257 $ 1,050
Other Short-Term Borrowings $ 88 $ 41
v3.22.2.2
Debt, Schedule of Long-Term Debt (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Debt Instrument [Line Items]    
Debt Instrument, Redemption Price, Percentage 100.00%  
Redemption Price Certain Events 101.00%  
Long-term Debt, Fair Value $ 6,033 $ 7,692
v3.22.2.2
Debt, Carrying Value of Long-Term Debt (Details) - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
Debt Instrument [Line Items]    
Long-Term Debt, Gross $ 6,590 $ 7,531
Less unamortized debt discounts and issuance costs 33 40
Current portion of long-term debt [1] 73 799
Long-term debt, excluding current portion 6,484 6,692
2.300% Senior Notes due May 2022    
Debt Instrument [Line Items]    
Long-Term Debt, Gross $ 0 800
Debt instrument, interest rate, stated percentage 2.30%  
2.750% Senior Notes due May 2024    
Debt Instrument [Line Items]    
Long-Term Debt, Gross $ 1,000 1,000
Debt instrument, interest rate, stated percentage 2.75%  
3.000% Senior Notes due May 2027    
Debt Instrument [Line Items]    
Long-Term Debt, Gross $ 1,000 1,000
Debt instrument, interest rate, stated percentage 3.00%  
1.375% Senior Notes due June 2027    
Debt Instrument [Line Items]    
Long-Term Debt, Gross $ 1,250 1,250
Debt instrument, interest rate, stated percentage 1.375%  
1.600% Senior Notes due April 2030    
Debt Instrument [Line Items]    
Long-Term Debt, Gross $ 1,750 1,750
Debt instrument, interest rate, stated percentage 1.60%  
1.750% Senior Notes due April 2032    
Debt Instrument [Line Items]    
Long-Term Debt, Gross $ 1,000 1,000
Debt instrument, interest rate, stated percentage 1.75%  
Other Long Term Debt    
Debt Instrument [Line Items]    
Long-Term Debt, Gross $ 590 $ 731
[1] Net of unamortized debt discounts and issuance costs.
v3.22.2.2
Debt, Schedule Of Long-Term Debt Maturities (Details)
$ in Millions
Aug. 28, 2022
USD ($)
Debt Disclosure [Abstract]  
2023 $ 73
2024 1,088
2025 110
2026 81
2027 2,250
Thereafter $ 2,988
v3.22.2.2
Leases, Supplemental Balance Sheet Information (Details) - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
Operating Lease and Finance Lease Right-of-Use-Assets [Abstract]    
Operating lease right-of-use assets $ 2,774 $ 2,890
Finance lease assets Other long-term assets Other long-term assets
OperatingLeaseandFinanceLeaserightofuseassets $ 4,394 $ 3,890
Current Operating and Finance Lease Liabilities [Abstract]    
Operating lease liabilities Other current liabilities Other current liabilities
Finance lease liabilities Other current liabilities Other current liabilities
Long-Term Operating and Finance Lease Liabilities [Abstract]    
Long-term operating lease liabilities $ 2,482 $ 2,642
Long-term finance lease liabilities Other long-term liabilities Other long-term liabilities
OperatingLeaseandFinanceLeaseLiabilities $ 4,349 $ 3,916
Other Supplemental Balance Sheet Information [Abstract]    
Operating Lease, Weighted Average Remaining Lease Term 20 years 21 years
Finance Lease, Weighted Average Remaining Lease Term 17 years 22 years
Operating Lease, Weighted Average Discount Rate, Percent 2.26% 2.16%
Finance Lease, Weighted Average Discount Rate, Percent 3.97% 4.91%
v3.22.2.2
Leases, Components of Lease Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Lease, Cost [Abstract]      
Operating Lease, Cost $ 297 $ 296 $ 252
Finance Lease, Right-of-Use Asset, Amortization 128 50 31
Finance Lease, Interest Expense 45 37 33
Variable Lease, Cost 157 151 87
Total lease costs $ 627 $ 534 $ 403
v3.22.2.2
Leases, Supplemental Cash Flow Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Leases [Abstract]      
Operating Lease, Payments $ 277 $ 282 $ 258
Finance Lease, Interest Payment on Liability 45 37 33
Finance Lease, Principal Payments 176 67 49
Operating lease assets obtained in exchange for new or modified leases 231 350 354
Finance lease assets obtained in exchange for new or modified leases $ 794 $ 399 $ 317
v3.22.2.2
Leases, Future Minimum Payments (Details)
$ in Millions
Aug. 28, 2022
USD ($)
Operating Leases, Future Minimum Payments Due, Rolling Maturity [Abstract]  
2023 $ 277
2024 256
2025 210
2026 207
2027 186
Thereafter 2,332
Lessee, Operating Lease, Liability, to be Paid, Total 3,468
Less amount representing interest (747)
Operating Lease, Liability, Total 2,721
Finance Lease, Liability, Payment, Due, Rolling Maturity [Abstract]  
2023 288
2024 253
2025 280
2026 119
2027 88
Thereafter 1,191
Finance Lease, Liability, Payment, Due, Total 2,219
Less amount representing interest $ (591)
Finance Lease, Liability, Total Other Liabilities
Lessor, Operating Lease, Payments to be Received $ 83
LesseeOperatingandFinancingLeasesNotYetCommenced $ 660
v3.22.2.2
Stockholders' Equity - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Millions
 4 Months Ended 12 Months Ended
Aug. 28, 2022
Aug. 28, 2022
Aug. 29, 2021
Dividend Declared [Member]      
Dividends Payable [Line Items]      
Common Stock, Dividends, Per Share, Declared $ 0.90 $ 3.38 $ 12.98
Special Dividend [Member]      
Dividends Payable [Line Items]      
Payments of Dividends   $ 4,430  
SpecialDividendDeclared      
Dividends Payable [Line Items]      
Common Stock, Dividends, Per Share, Declared     $ 10.00
v3.22.2.2
Stockholders' Equity (Stock Repurchased During Period) (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Stockholders' Equity Note [Abstract]      
Stock Repurchase Program, Authorized Amount $ 4,000    
Stock Repurchase Program, Remaining Authorized Repurchase Amount $ 2,808    
Stock Repurchased and Retired During Period, Shares 863 1,358 643
Average price per share $ 511.46 $ 364.39 $ 308.45
Stock Repurchased and Retired During Period, Value $ 442 $ 495 $ 198
v3.22.2.2
Stock-Based Compensation Plans - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Jan. 24, 2019
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Weighted-average grant date fair value   $ 476.06 $ 369.15 $ 294.08
RSUs vested, but not yet delivered (shares)   2,456,000    
Restricted Stock Units (RSUs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Additional number of shares authorized   10,000,000    
Number of shares available to be granted as RSUs   10,445,000    
Time-based RSUs awards outstanding   3,328,000    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross   121,000    
Unrecognized compensation cost   $ 758    
Weighted-average recognition period   1 year 7 months 6 days    
RSUs vested, but not yet delivered (shares)   1,210,000    
Performance Shares [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Outstanding Performance Based To Be Granted   82,000    
2019 Incentive Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Additional number of shares authorized 17,500,000      
Employees [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based compensation arrangement by share-based payment award, award vesting period   5 years    
Share-based compensation arrangement by share-based payment number of years of service   25 years    
Non Employee Directors [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based compensation arrangement by share-based payment award, award vesting period   3 years    
Share-based compensation arrangement by share-based payment number of years of service   5 years    
Maximum [Member] | Restricted Stock Units (RSUs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares available to be granted as RSUs   15,885,000    
Maximum [Member] | 2019 Incentive Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares available to be granted as RSUs 27,800,000      
v3.22.2.2
Stock-Based Compensation Plans - Summary of RSU Transactions (Details) - $ / shares
shares in Thousands
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Number of units      
Outstanding at the end of 2021 4,349    
Granted 1,679    
Vested and delivered (2,456)    
Forfeited (123)    
Outstanding at the end of 2022 3,449 4,349  
Weighted average grant date fair value      
Outstanding at the end of 2021 $ 257.88    
Granted 476.06 $ 369.15 $ 294.08
Vested and delivered 290.18    
Forfeited 332.84    
Outstanding at the end of 2022 $ 338.41 $ 257.88  
v3.22.2.2
Stock-Based Compensation Plans - Summary of Stock-Based Compensation Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Total stock-based compensation expense before income taxes $ 724 $ 665 $ 619
Less income tax benefit 154 140 128
Stock-based compensation expense, net $ 570 $ 525 $ 491
v3.22.2.2
Income Taxes (Income Before Income Taxes) (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Income Tax Disclosure [Abstract]      
Domestic $ 5,759 $ 4,931 $ 4,204
Foreign 2,081 1,749 1,163
INCOME BEFORE INCOME TAXES $ 7,840 $ 6,680 $ 5,367
v3.22.2.2
Income Taxes (Schedule of Foreign And Domestic Income Taxes) (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Federal [Abstract]      
Current $ 798 $ 718 $ 616
Deferred (35) 84 77
Total federal 763 802 693
State [Abstract]      
Current 333 265 230
Deferred (5) 11 8
Total state 328 276 238
Foreign [Abstract]      
Current 851 557 372
Deferred (17) (34) 5
Total foreign 834 523 377
Total provision for income taxes $ 1,925 $ 1,601 $ 1,308
v3.22.2.2
Income Taxes (Reconciliation Between Statutory And Effective Rates) (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Federal taxes at statutory rate $ 1,646 $ 1,403 $ 1,127
Federal taxes at statutory rate (percent) 21.00% 21.00% 21.00%
State taxes, net $ 267 $ 243 $ 190
State taxes, net (percent) 3.40% 3.60% 3.60%
Foreign taxes, net $ 231 $ 92 $ 92
Foreign taxes, net (percent) 3.00% 1.40% 1.70%
Employee stock ownership plan (ESOP) $ (23) $ (91) $ (24)
Employee stock ownership plan (ESOP) (percent) (0.30%) (1.30%) (0.50%)
Other $ (196) $ (46) $ (77)
Other (percent) (2.50%) (0.70%) (1.40%)
Total provision for income taxes $ 1,925 $ 1,601 $ 1,308
Total (percent) 24.60% 24.00% 24.40%
Effective Income Tax Rate Reconciliation, Deduction, Amount $ 130 $ 163 $ 81
Provision for income taxes 1,925 1,601 1,308
Special Dividend [Member]      
Total provision for income taxes 70    
Provision for income taxes 70    
Restricted Stock Units (RSUs)      
Total provision for income taxes 94 75 77
Provision for income taxes $ 94 $ 75 $ 77
v3.22.2.2
Income Taxes (Components of Deferred Tax Assets And Liabilities) (Details) - USD ($)
$ in Millions
Aug. 28, 2022
Aug. 29, 2021
Tax Credit Carryforward [Line Items]    
Equity compensation $ 84 $ 72
Deferred Income 302 161
Foreign tax credit carry forward 201 146
Operating lease liabilities 727 769
Accrued liabilities and reserves 694 681
Deferred Tax Assets, Other 5 62
Deferred Tax Assets, Gross, Total 2,013 1,891
Tax Credit Carryforward, Valuation Allowance (313) (214)
Deferred Tax Assets, Net of Valuation Allowance, Total 1,700 1,677
Property and equipment (962) (935)
Merchandise inventories (231) (216)
Operating lease right-of-use assets (701) (744)
Foreign branch deferreds (85) (92)
Deferred Tax Liabilities, Gross, Total 1,979 1,987
Deferred Tax Liabilities, Net, Total 279 310
Deferred Tax Assets, Net 445 444
Undistributed Earnings of Foreign Subsidiaries 2,779  
Other Noncurrent Liabilities    
Tax Credit Carryforward [Line Items]    
Deferred Income Tax Liabilities, Net 724 754
Deferred Income Tax Liabilities, Net $ 724 $ 754
v3.22.2.2
Income Taxes (Gross Unrecognized Tax Benefits) (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]    
Gross unrecognized tax benefit at beginning of year $ 33 $ 30
Gross increases—current year tax positions 1 2
Gross increases—tax positions in prior years 12 2
Gross decreases—tax positions in prior years (12) 0
Gross decreases—settlements (12) 0
Lapse of statute of limitations (6) (1)
Gross unrecognized tax benefit at end of year 16 33
Unrecognized tax benefits that would impact effective tax rate $ 15 $ 30
v3.22.2.2
Net Income per Common and Common Equivalent Share - Schedule of Earnings per Share Effect on Net Income and Weighted Averegae Number of Dilutive Potential Common Stock (Details) - USD ($)
shares in Thousands, $ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Earnings Per Share [Abstract]      
NET INCOME ATTRIBUTABLE TO COSTCO $ 5,844 $ 5,007 $ 4,002
Weighted average number of common shares used in basic net income per common share 443,651 443,089 442,297
RSUs and other 1,106 1,257 1,604
Weighted average number of common shares and dilutive potential of common stock used in diluted net income per share 444,757 444,346 443,901
v3.22.2.2
Segment Reporting Information by Segment (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Segment Reporting Information [Line Items]      
Total revenue $ 226,954 $ 195,929 $ 166,761
Operating Income 7,793 6,708 5,435
Depreciation and amortization 1,900 1,781 1,645
Additions to property and equipment 3,891 3,588 2,810
Property and Equipment, net 24,646 23,492 21,807
Total assets 64,166 59,268 55,556
Operating Segments | United States Operations      
Segment Reporting Information [Line Items]      
Total revenue 165,294 141,398 122,142
Operating Income 5,268 4,470 3,822
Depreciation and amortization 1,436 1,339 1,248
Additions to property and equipment 2,795 2,612 2,060
Property and Equipment, net 17,205 15,993 14,916
Total assets 44,904 39,589 38,366
Operating Segments | Canadian Operations      
Segment Reporting Information [Line Items]      
Total revenue 31,675 27,298 22,434
Operating Income 1,346 1,093 778
Depreciation and amortization 180 177 155
Additions to property and equipment 388 272 258
Property and Equipment, net 2,459 2,317 2,172
Total assets 6,558 5,962 5,270
Operating Segments | Other International Operations      
Segment Reporting Information [Line Items]      
Total revenue 29,985 27,233 22,185
Operating Income 1,179 1,145 835
Depreciation and amortization 284 265 242
Additions to property and equipment 708 704 492
Property and Equipment, net 4,982 5,182 4,719
Total assets $ 12,704 $ 13,717 $ 11,920
v3.22.2.2
Segment Reporting Information by Item Category (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 28, 2022
Aug. 29, 2021
Aug. 30, 2020
Revenue from External Customer [Line Items]      
Net Sales $ 226,954 $ 195,929 $ 166,761
Food and Sundries [Member]      
Revenue from External Customer [Line Items]      
Net Sales 85,629 77,277 68,659
Non-Foods      
Revenue from External Customer [Line Items]      
Net Sales 61,100 55,966 44,807
Fresh Foods      
Revenue from External Customer [Line Items]      
Net Sales 29,527 27,183 23,204
Warehouse ancillary and other businesses      
Revenue from External Customer [Line Items]      
Net Sales 46,474 31,626 26,550
Product [Member]      
Revenue from External Customer [Line Items]      
Net Sales $ 222,730 $ 192,052 $ 163,220