ManpowerGroup 2008 Annual Report Download - page 40

38 Management’s Discussion & Analysis Manpower Annual Report 2008
Management’s Discussion & Analysis
of financial condition and results of operations
The FASB issued Statement No. 157, “Fair Value Measurements” (“SFAS 157”) in September 2006. SFAS 157 defines fair
value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and
expands disclosures about fair value measurements. Subsequently in February 2008, the FASB issued FASB Staff Position
No. FAS 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements
That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” (“FSP
FAS 157-1”) and FASB Staff Position No. FAS 157-2, “Partial Deferral of the Effective Date of Statement 157” (“FSP FAS
157-2”). FSP FAS 157-1 removed leasing transactions accounted for under Statement No. 13 and related guidance from the
scope of SFAS 157. FSP FAS 157-2 deferred the effective date of SFAS 157 for all nonfinancial assets and nonfinancial
liabilities to fiscal years beginning after November 15, 2008. We implemented SFAS 157 for financial assets and financial
liabilities effective January 1, 2008 with no material impact on our consolidated financial statements. We are currently
assessing the impact of SFAS 157 for nonfinancial assets and nonfinancial liabilities on our financial statements. (See Note 1
for further information about our fair value measurements as of December 31, 2008.)
In December 2006, we adopted Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“SFAS 158”). Under its measurement
date provisions, SFAS 158 requires us to measure the funded status of our defined benefit and retiree medical plans as of the
balance sheet date in 2008, rather than as of an earlier measurement date. We adopted the measurement date provisions as
of December 31, 2008. The net impact of the measurement date change was a $1.7 million decrease in the pension asset,
which was accounted for as a $0.1 million increase in Retained Earnings and a $1.8 million decrease in Accumulated Other
Comprehensive (Loss) Income on our consolidated balance sheet. See the consolidated statements of shareholders’ equity
for the effect of applying the provisions.
In January 2008, we adopted Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS
159”). SFAS 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized
gains and losses on items for which the fair value option has been elected are reported in earnings. As of the initial adoption,
we did not elect the fair value option for any existing eligible items under SFAS 159.
In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an
amendment of ARB No. 51” (“SFAS 160”). SFAS 160 requires (a) that noncontrolling (minority) interests be reported as a
component of shareholders’ equity, (b) that net income attributable to the parent and to the noncontrolling interest be
separately identified in the consolidated statement of operations, (c) that changes in a parent’s ownership interest while the
parent retains its controlling interest be accounted for as equity transactions, (d) that any retained noncontrolling equity
investment upon the deconsolidation of a subsidiary be initially measured at fair value, and (e) that sufficient disclosures are
provided that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling
owners. SFAS 160 is effective for us in 2009 and must be applied prospectively. However, the presentation and disclosure
requirements of the statement shall be applied retrospectively for all periods presented. We do not expect the adoption of this
statement to have a material impact on our consolidated financial statements.
In March 2008, the FASB issued Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities”
(“SFAS 161”). SFAS 161 requires enhanced disclosures about derivative instruments and hedging activities to enable
investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS 161
is effective for us in 2009.