ManpowerGroup 2007 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2007 ManpowerGroup annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 71

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71

41
Manpower 2007 Annual Report
Notes to Consolidated Financial Statements
We may be required to perform an impairment review prior to our scheduled annual review if certain events occur, including
lower than forecasted earnings levels for certain reporting units. In addition, changes to other assumptions could signifi cantly
impact our estimate of the fair value of our reporting units. Such a change may result in an impairment charge, which could have
a signifi cant impact on the reportable segments that include the related reporting units and our consolidated fi nancial statements.
Marketable Securities
We account for our marketable security investments under SFAS No. 115, “Accounting for Certain Investments in Debt and
Equity Securities,” and have determined that all such investments are classifi ed as available-for-sale. Accordingly, unrealized
gains and unrealized losses that are determined to be temporary, net of related income taxes, are included in Accumulated
Other Comprehensive Income, which is a separate component of Shareholders’ Equity. Realized gains and losses, and unrealized
losses determined to be other-than-temporary, are recorded in our consolidated statements of operations. As of December 31,
2007 and 2006, our available-for-sale investments had a market value of $0.3 and $0.2, respectively, and an adjusted cost
basis of $0.1, and none had unrealized losses. In December 2005, we sold one of our available-for-sale investments for a gain
of $2.6. The proceeds of $8.8 were received during 2006.
We hold a 49% interest in our Swiss franchise, which maintains an investment portfolio with a market value of $144.9 and
$131.8 as of December 31, 2007 and 2006, respectively. This portfolio is comprised of a wide variety of European and U.S.
debt and equity securities as well as various professionally-managed funds, all of which are classifi ed as available-for-sale.
Our net share of realized gains and losses, and declines in value determined to be other-than-temporary, are included in our
consolidated statements of operations. Our share of net unrealized gains and unrealized losses that are determined to be
temporary related to these investments are included in Accumulated Other Comprehensive Income, with the offsetting amount
increasing or decreasing our investment in the franchise. In this portfolio, there were no unrealized losses by investment type as
of December 31, 2007 and 2006.
Capitalized Software
We capitalize purchased software as well as internally developed software. Internal software development costs are capitalized
from the time the internal use software is considered probable of completion until the software is ready for use. Business
analysis, system evaluation, selection and software maintenance costs are expensed as incurred. Capitalized software costs
are amortized using the straight-line method over the estimated useful life of the software which ranges from 3 to 10 years. The
net capitalized software balance of $40.4 and $43.9 as of December 31, 2007 and 2006, respectively, is included in Other
Assets in the consolidated balance sheets. Amortization expense related to the capitalized software costs was $10.7, $9.5 and
$10.8 for 2007, 2006 and 2005, respectively.
Property and Equipment
A summary of property and equipment as of December 31 is as follows:
2007 2006
Land $ 1.6 $ 2.6
Buildings 17.4 31.5
Furniture, fi xtures and autos 230.2 213.0
Computer equipment 189.3 176.6
Leasehold improvements 322.3 269.5
Property and Equipment $ 760.8 $ 693.2
Property and equipment are stated at cost and are depreciated using primarily the straight-line method over the following
estimated useful lives: buildings – up to 40 years; leasehold improvements – lesser of life of asset or expected lease term;
furniture and equipment – 3 to 15 years. Expenditures for renewals and betterments are capitalized whereas expenditures for
repairs and maintenance are charged to income as incurred. Upon sale or disposition of property and equipment, the difference
between the unamortized cost and the proceeds is recorded as either a gain or a loss and is included in our consolidated
statements of operations. Long-lived assets are evaluated for impairment in accordance with the provisions of SFAS No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets.”