ManpowerGroup 2008 Annual Report Download - page 52

50 Notes to Consolidated Financial Statements Manpower Annual Report 2008
Notes To Consolidated Financial Statements
in millions, except per share data
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 $33.6 and $40.4 as of December 31, 2008 and 2007, respectively, is
included in Other Assets in the consolidated balance sheets. Amortization expense related to the capitalized software costs
was $12.1, $10.7 and $9.5 for 2008, 2007 and 2006, respectively.
PROPERTY AND EQUIPMENT
A summary of property and equipment as of December 31 is as follows:
2008 2007
Land $ 3.5 $ 1.6
Buildings 18.7 17.4
Furniture, fixtures, and autos 222.2 230.2
Computer equipment 180.4 189.3
Leasehold improvements 319.2 322.3
Property and equipment $ 744.0 $ 760.8
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
FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”
DERIVATIVE FINANCIAL INSTRUMENTS
We account for our derivative instruments in accordance with FASB Statement Nos. 133, 137, and 149 related to “Accounting
for Derivative Instruments and Hedging Activities.” Derivative instruments are recorded on the balance sheet as either an
asset or liability measured at their fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of
the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated
as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded as a component of
Accumulated Other Comprehensive (Loss) Income and recognized in the consolidated statements of operations when the
hedged item affects earnings. The ineffective portions of the changes in the fair value of hedges are recognized in earnings.
FOREIGN CURRENCY TRANSLATION
The financial statements of our non-U.S. subsidiaries have been translated in accordance with FASB Statement No. 52,
“Foreign Currency Translation” (“SFAS 52”). Under SFAS 52, asset and liability accounts are translated at the current exchange
rate and income statement items are translated at the weighted-average exchange rate for the year. The resulting translation
adjustments are recorded as a component of Accumulated Other Comprehensive (Loss) Income, which is included in
Shareholders’ Equity.
Certain foreign currency denominated borrowings are accounted for as a hedge of our net investment in our subsidiaries with
the related functional currencies. Since our net investment in these subsidiaries exceeds the amount of the related borrowings,
all translation gains or losses related to these borrowings are included as a component of Accumulated Other Comprehensive
(Loss) Income.