ManpowerGroup 2009 Annual Report Download - page 48

Notes To Consolidated Financial Statements
in millions, except share and per share data
46 Manpower 2009 Annual Report Notes to Consolidated Financial Statements
01.
Summary Of Signifi cant Accounting Policies
NATURE OF OPERATIONS
Manpower Inc. is a world leader in the employment services industry. Our worldwide network of nearly 4,000 offi ces in 82
countries and territories enables us to meet the needs of our clients in all industry segments. Our largest operations, based
on revenues, are located in the U.S., France, Italy and the United Kingdom. We specialize in permanent, temporary and
contract recruitment; employee assessment and selection; training; outsourcing; and outplacement and consulting services.
We provide services to a wide variety of clients, none of which individually comprise a signifi cant portion of revenues for us as
a whole.
USE OF ESTIMATES
The preparation of fi nancial 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 fi nancial statements and the reported amounts of revenues and expenses
for the reporting period. Actual results could differ from these estimates.
BASIS OF CONSOLIDATION
The consolidated fi nancial 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 fi nancial statements
refl ect 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 the accounting guidance on consolidation of variable interest
entities. These investments were $65.5 and $81.0 as of December 31, 2009 and 2008, respectively, and are included as
Other Assets in the consolidated balance sheets. The decrease in these investments in 2009 compared to 2008 is primarily
due to the sale of an equity investment in Japan. Included in Shareholders’ Equity as of December 31, 2009 and 2008 are
$56.2 and $53.2 of unremitted earnings from investments accounted for using the equity method. All signifi cant intercompany
accounts and transactions have been eliminated in consolidation.
REVENUES AND RECEIVABLES
We generate revenues from sales of services by our company-owned branch operations and from fees earned on sales of
services by our franchise operations. Revenues are recognized as services are performed. The majority of our revenues are
generated by our recruitment business, where billings are generally negotiated and invoiced on a per-hour basis. Accordingly,
as contingent workers are placed, we record revenue based on the hours worked. Permanent recruitment revenues are
recorded as placements are made. Provisions for sales allowances, based on historical experience, are recognized at the
time the related sale is recognized.
Our franchise agreements generally state that franchise fees are calculated based on a percentage of revenues. We record
franchise fee revenues monthly based on the amounts due under the franchise agreements for that month. Franchise fees,
which are included in Revenues from Services, were $22.3, $30.9, and $35.7 for the years ended December 31, 2009, 2008
and 2007, respectively.
In our outplacement business, we recognize revenue from individual programs over the estimated period in which services
are rendered to candidates. For large projects within the outplacement business, we recognize revenue ratably over the
period in which the services are provided. In our consulting business, revenue is recognized upon the performance of the
service under the consulting service contract. For performance-based contracts, we defer recognizing revenue until the
performance criteria has been met.
The amount billed for outplacement, consulting services and performance-based contracts in excess of the amount
recognized as revenue is recorded as Deferred Revenue and included in Accrued Liabilities for the current portion and Other
Long-Term Liabilities for the long-term portion in our Consolidated Balance Sheets. As of December 31, 2009 and 2008, the
current portion of Deferred Revenue was $54.3 and $57.4, respectively, and the long-term portion of Deferred Revenue was
$25.2 and $27.5, respectively.
We record revenues from sales of services and the related direct costs in accordance with the accounting guidance on
reporting revenue gross as a principal versus net as an agent. In situations where we act as a principal in the transaction, we
report gross revenues and cost of services. When we act as an agent, we report the revenues on a net basis. Amounts billed
to clients for out-of-pocket or other cost reimbursements are included in Revenues from Services, and the related costs are
included in Cost of Services.