ManpowerGroup 2004 Annual Report Download - page 65

MANPOWER INC. 2004 Annual Report63
01.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Manpower Inc. is a world leading provider of contemporary work services to the world’s labor markets. Our worldwide
network of over 4,300 offices in 67 countries and territories enables us to meet the needs of our customers in all industry
segments. Our largest operations, based on revenues, are located in the United States, France and the United
Kingdom. We specialize in permanent, temporary and contract recruitment; employee assessment; training; internal audit,
accounting, technology and tax services; career transition and organizational consulting services. We provide services
to a wide variety of customers, none of which individually comprises a significant portion of revenues for us as a whole.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses for the reporting period. Actual results could differ from these estimates.
We have used estimates to establish liability balances for various items, including amounts related to social program
remittances in France and payroll tax audit exposures. The liabilities are determined at each entity, based on our his-
torical experience and related trends, and will be adjusted to the extent that our actual experience differs from our cur-
rent estimates. In France, we are currently under audit for payroll tax remittances made during 2001 and for remittances
made during 2002 and 2003. We have received a preliminary notification related to 2001 and have responded to the
notification with additional information. We currently do not expect a significant adjustment to our December 31, 2004
estimate of additional remittances as a result of this notification. In the fourth quarter of 2003, we reduced our estimated
liability related to the social program remittances in France by $16.1 due to recent historical trends in the amounts
remitted to customers. During 2004, we increased our liability for payroll tax remittances by $12.8.
In the Netherlands, we are currently under audit for compliance with regulations related to the collection and maintenance
of payroll-related documents for our temporary employees. We have not received any notification of findings related
to this audit, however we currently do not expect an assessment to have a significant impact on the consolidated
financial statements.
Reclassifications
Certain amounts in the 2003 and 2002 notes to consolidated financial statements have been reclassified to be consistent
with the current year presentation.
Basis of Consolidation
The consolidated financial statements include our operating results and the operating results of all of our subsidiaries.
For subsidiaries in which we have an ownership interest of 50% or less, but more than 20%, the consolidated financial
statements reflect our ownership share of those earnings using the equity method of accounting. These investments,
as well as certain other relationships, are also evaluated for consolidation under FASB (Financial Accounting Standards
Board) Interpretation No. 46R, “Consolidation of Variable Interest Entities.” These investments were $82.7 and $95.7 as
of December 31, 2004 and 2003, respectively, and are included as Other Assets in the consolidated balance sheets.
Included in Shareholders’ Equity as of December 31, 2004 are $45.7 of unremitted earnings from investments accounted
for using the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data