Making people successful in a changing world - Annual Report 2012

Notes to Consolidated Financial Statements - as of December 30, 2001In millions, except share and per share amountsNote 1 – The Business and Summary of SignificantAccounting PoliciesBusinessAdecco’s principal business is providing personnel services tocompanies and industry worldwide. Adecco’s personnel servicesinclude providing temporary personnel, placing permanentemployees, training and testing temporary and permanentemployees, outsourcing and providing outplacement counsellingservices. Adecco provides these services by contract to businesseslocated throughout North America, Europe, Asia Pacific andLatin America.Basis of presentationThe consolidated financial statements are prepared in accordancewith accounting principles generally accepted in the United Statesof America ("U.S. GAAP") and the provisions of Swiss law.Adecco’s fiscal year ends on the Sunday nearest to December 31.For 2001, 2000 and 1999 the fiscal years contained 52 weeks andended on December 30, 2001, December 31, 2000 and January 2,2000 respectively.Principles of consolidationThe consolidated financial statements include the accounts ofAdecco SA, a Swiss corporation, and its majority-owned subsidiaries(collectively, “Adecco”). The equity and net income attributable tominority shareholders’ interests are shown separately in theconsolidated financial statements. Investments in which Adeccoexerts significant influence are accounted for under the equitymethod. Investments with less than 20% ownership are accountedfor under the cost method. All material intercompany accounts andtransactions have been eliminated.Use of estimatesThe preparation of financial statements in conformity with U.S.GAAP requires management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of theconsolidated financial statements and the reported componentsof results of operations during the reporting period. Actual resultscould differ from those estimates.Recognition of revenueAdecco’s temporary personnel services revenues are recognisedwhen the services are rendered. Revenues from permanentplacement services are recognised at the time the candidate beginsfull-time employment and an allowance is established for nonfulfilmentof permanent placement obligations. Revenues fromoutsourcing, outplacement and other personnel services aregenerally recognised as the services are provided. Adecco presentsrevenues and direct costs of services in its financial statements inaccordance with Emerging Issues Task Force (“EITF”) Issue No. 99-19, “Reporting Revenue as a Principal Versus Net as an Agent”. Thepronouncement requires Adecco to record the gross amounts of itsrevenues and direct costs of services for arrangements wherebyAdecco acts as a principal in the transaction and has risks andrewards of ownership (such as the liability for the cost of temporarypersonnel and the risk of loss for collection and performance orpricing adjustments). Under arrangements where Adecco acts asan agent and acts principally as a contractor for subcontractors, onlythe fees are recorded as revenues.Marketing costsAdvertising and marketing costs totalled CHF 260, CHF 263 andCHF 168 in 2001, 2000 and 1999 respectively. These costs areincluded in selling, general and administrative expenses and areexpensed as incurred.Foreign currency translationAdecco’s operations are conducted in 58 countries and the financialstatements of foreign subsidiaries are reported in the applicableforeign currencies (functional currencies). For inclusion intoAdecco’s consolidated financial statements, the translation from theapplicable functional currency into the reporting currencySwiss francs (“CHF”) is performed for assets and liabilities using yearend exchange rates and for revenues, expenses and cash flows usingweighted average exchange rates. Translation adjustments areincluded as a component of other comprehensive income inshareholders’ equity. Exchange gains and losses on intercompanybalances that are considered permanently invested are also includedin equity. Business transactions in foreign currencies are recorded inthe statement of operations at the approximate rate applicable at thetime of the transaction or the weighted average rate.Cash and cash equivalentsAll highly liquid instruments with an original maturity of threemonths or less are considered to be cash equivalents.Accounts receivableAccounts receivable are recorded at their net realisable value afterdeducting an allowance for doubtful accounts. Such deductionsreflect specific cases and estimates based on historical evidence ofcollectibility. Adecco accounts for the securitisation of tradeaccounts receivable in accordance with SFAS No. 140 “Accountingfor Transfers and Servicing of Financial Assets and Extinguishmentsof Liabilities”. This statement replaces SFAS No. 125 “Accounting forTransfers and Servicing of Financial Assets and Extinguishment ofLiabilities” and provides accounting and reporting standards fortransfers and servicing of financial assets and extinguishment ofliabilities. Those standards are based on consistent application ofa financial components approach that focuses on control. Adeccoapplies the new accounting rules prospectively to transactions afterMarch 31, 2001. The adoption of SFAS No. 140 had no materialimpact on Adecco's consolidated financial statements.Capitalised cost for internal use softwareAdecco expenses costs incurred in the preliminary project stage.Thereafter, costs incurred in developing or obtaining internal usesoftware are capitalised. Capitalised software costs are amortised ona straight-line basis over their estimated useful lives, typicallybetween 3 and 5 years.12