ManpowerGroup 2013 Annual Report Download - page 58

ManpowerGroup 2013 Annual Report Notes to Consolidated Financial Statements
56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data
01.
Summary of Significant Accounting Policies
NATURE OF OPERATIONS
ManpowerGroup Inc. is a world leader in the innovative workforce solutions and services industry. Our global network of
over 3,100 offices in 80 countries and territories allows us to meet the needs of our global, multinational and local clients
across all major industry segments. Our largest operations, based on revenues, are located in the United States, France,
Italy and the United Kingdom. We specialize in permanent, temporary and contract recruitment and assessment; training
and development; outsourcing; career management and workforce consulting services. We provide services to a wide
variety of clients, none of which individually comprise 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.
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 the accounting guidance on consolidation of
variable interest entities. These investments were $140.2 and $85.3 as of December 31, 2013 and 2012, respectively, and
are included in other assets in the Consolidated Balance Sheets. Included in shareholders’ equity as of December 31, 2013
and 2012 are $74.4 and $67.2, respectively, of unremitted earnings from investments accounted for using the equity
method. All significant intercompany accounts and transactions have been eliminated in consolidation.
During the third quarter of 2013, we determined that the carrying amount of the equity interest in our Swiss franchise was
understated by $37.7 due to an error in recording the currency effect on the investment. We believe that the error was not
material to the Consolidated Financial Statements for the year ended December 31, 2013 or the prior period consolidated
financial statements. Accordingly, we recorded an adjustment to increase other assets and accumulated other
comprehensive income by $37.7 on the Consolidated Balance Sheet effective September 30, 2013 and the impact is
included in foreign currency translation adjustments on the Consolidated Statements of Comprehensive Income for the year
ended December 31, 2013. There was no impact to the Consolidated Statements of Operations or Consolidated Statements
of Cash Flows for any period presented.
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 revenues 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 $24.4, $23.9 and $25.2 for the years ended December 31, 2013, 2012
and 2011, respectively.
In our outplacement business, we recognize revenues from individual programs and for large projects over the estimated
period in which services are rendered to candidates. In our consulting business, revenues are recognized upon the
performance of the service under the consulting service contract. For performance-based contracts, we defer recognizing
revenues until the performance criteria have been met.