Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 30, 2012

Nature of Operations [Text Block]

Nature of Operations  Kelly Services, Inc. is a global workforce solutions provider operating throughout the world.

Fiscal Period, Policy [Policy Text Block]

Fiscal Year  The Company's fiscal year ends on the Sunday nearest to December 31.  The three most recent years ended on December 30, 2012 (2012), January 1, 2012 (2011) and January 2, 2011 (2010), all of which contained 52 weeks.  The Company’s operations in Brazil are accounted for on a one-month lag.  The Company’s equity investment in TS Kelly Workforce Solutions is accounted for on a one-quarter lag (See Investment in Equity Affiliate footnote).  Any material transactions in the intervening period are disclosed or accounted for in the current reporting period.  Period costs included in selling, general and administrative (“SG&A”) expenses are recorded on a calendar-year basis.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation  The consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiaries.  All intercompany accounts and transactions have been eliminated.

Marketable Securities, Available-for-sale Securities, Policy [Policy Text Block]

Available-For-Sale Investment  Available-for-sale investments are carried at fair value with the unrealized gains or losses, net of tax, included as a component of accumulated other comprehensive income (loss) in stockholders’ equity.  Realized losses and declines in value below cost judged to be other-than-temporary on such securities are included as a component of asset impairments expense in the consolidated statement of earnings.  The fair values of available-for-sale investments are based on quoted market prices.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation  All of the Company’s international subsidiaries use their local currency as their functional currency.  Revenue and expense accounts of foreign subsidiaries are translated to U.S. dollars at average exchange rates, while assets and liabilities are translated to U.S. dollars at year-end exchange rates.  Resulting translation adjustments, net of tax, where applicable, are reported as accumulated foreign currency translation adjustments in stockholders’ equity and are recorded as a component of accumulated other comprehensive income.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition  Revenue from services is recognized as services are provided by the temporary or contract  employees.  Revenue from permanent placement services is recognized at the time the permanent placement candidate begins full-time employment.  Revenue from other fee-based consulting services is recognized when the services are provided.  Provisions for sales allowances, based on historical experience, are recognized at the time the related sale is recognized as a reduction in revenue from services, and are included in the allowance for uncollectible accounts receivable.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy

Allowance for Uncollectible Accounts Receivable The Company records an allowance for uncollectible accounts receivable based on historical loss experience, customer payment patterns and current economic trends.The reserve for sales allowances, as discussed above, is also included in the allowance for uncollectible accounts receivable.The Company reviews the adequacy of the allowance for uncollectible accounts receivable on a quarterly basis and, if necessary, increases or decreases the balance by recording a charge or credit to SG&A expenses.

Cost of Sales, Policy [Policy Text Block]

Cost of Services  Cost of services are those costs directly associated with the earning of revenue.  The primary examples of these types of costs are temporary employee wages, along with associated payroll taxes, temporary employee benefits, such as service bonus and holiday pay, and workers’ compensation costs.  These costs differ fundamentally from SG&A expenses in that they arise specifically from the action of providing our services to customers whereas SG&A costs are incurred regardless of whether or not we place temporary employees with our customers.

Effective with the first quarter of 2012, certain vendor management and other technology costs which were previously included in SG&A expenses are now included in cost of services, and 2011 and 2010 results were revised to conform to this presentation.  The only effect of this change was to increase cost of services and decrease SG&A expenses (and gross profit) by $10.8 million in 2011 and $7.6 million in 2010 from those amounts previously reported in 2011 and 2010.

Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block]

Advertising Expenses  Advertising expenses from continuing operations, which are expensed as incurred and are included in SG&A expenses, were $8.5 million in 2012, $7.5 million in 2011 and $7.0 million in 2010.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes.  Estimates are used for, but not limited to, the accounting for the allowance for uncollectible accounts receivable, workers’ compensation, goodwill and long-lived asset impairment, litigation costs and income taxes.  Actual results could differ materially from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Equivalents  Cash and equivalents are stated at fair value.  The Company considers securities with original maturities of three months or less to be cash and equivalents.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and EquipmentProperty and equipment are stated at cost and are depreciated over their estimated useful lives, principally by the straight-line method.  Cost and estimated useful lives of property and equipment by function are as follows:

Category	2012		2011		Life
		(In millions of dollars)
Land	$	3.8	$	3.8		-
Work in process		7.2		8.6		-
Buildings and improvements		56.5		55.5	15	to	45 years
Computer hardware and software		202.3		190.0	3	to	12 years
Equipment, furniture and fixtures		33.0		33.6			5 years
Leasehold improvements		34.8		35.4	The lesser of the life of the lease or 5 years.
Total property and equipment	$	337.6	$	326.9

The Company capitalizes external costs and internal payroll costs incurred in the development of software for internal use as required by the Internal-Use Software Subtopic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).   Work in process represents capitalized costs for internal use software not yet in service and is included in property and equipment on the consolidated balance sheet.  Depreciation expense from continuing operations was $19.0 million for 2012, $28.9 million for 2011 and $31.3 million for 2010.

Lease, Policy [Policy Text Block]

Operating Leases  The Company recognizes rent expense on a straight-line basis over the lease term.  This includes the impact of both scheduled rent increases and free or reduced rents (commonly referred to as “rent holidays”).  The Company records allowances provided by landlords for leasehold improvements as deferred rent in the consolidated balance sheet and as operating cash flows in the consolidated statement of cash flows.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Other Intangible Assets  Goodwill represents the excess of the purchase price over the fair value of net assets acquired.  Purchased intangible assets with definite lives are recorded at estimated fair value at the date of acquisition and are amortized over their respective useful lives (from 3 to 15 years) on a straight-line basis or, where appropriate, on an accelerated basis commensurate with the related cash flows.

Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets and Intangible Assets  The Company evaluates long-lived assets and intangible assets with definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  When estimated undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset is written down to its estimated fair value.  Assets to be disposed of by sale, if any, are reported at the lower of the carrying amount or estimated fair value less cost to sell.

We test goodwill for impairment at the reporting unit level annually and whenever events or circumstances make it more likely than not that an impairment may have occurred.  We have determined that our reporting units are the same as our operating and reportable segments based on our organizational structure and the financial information that is provided to and reviewed by management.  We may use a qualitative assessment for one or more reporting units for the annual goodwill impairment test if we have determined that it is more likely than not that the fair value of the reporting unit(s) is more than their carrying value.

For reporting units where the qualitative assessment is not used, goodwill is tested for impairment using a two-step process.  In the first step, the estimated fair value of a reporting unit is compared to its carrying value.  If the estimated fair value of a reporting unit exceeds the carrying value of the net assets assigned to a reporting unit, goodwill is not considered impaired and no further testing is required.

If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of a reporting unit, a second step of the impairment test is performed in order to determine the implied fair value of a reporting unit’s goodwill.  If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, goodwill is deemed impaired and is written down to the extent of the difference.

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Accounts Payable  Included in accounts payable are outstanding checks in excess of funds on deposit.  Such amounts totaled $22.2 million and $18.9 million at year-end 2012 and 2011, respectively.

Income Tax, Policy [Policy Text Block]

Income Taxes  The Company accounts for income taxes using the liability method.  Under this method, deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Uncertain tax positions that are taken or expected to be taken in a tax return are recognized in the financial statements when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information.  A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

Interest and penalties related to income taxes are accounted for as income tax expense.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation  The Company may grant restricted stock awards and units (collectively, "restricted stock"), stock options (both incentive and nonqualified), stock appreciation rights and performance awards to key employees utilizing the Company’s Class A stock.The Company utilizes the market price on the date of grant as the fair market value for restricted stock and estimates the fair value of stock option awards on the date of grant using an option-pricing model.  The value of awards that are ultimately expected to vest is recognized as expense over the requisite service periods in SG&A expense in the Company’s consolidated statements of earnings.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share  Restricted stock that entitle their holders to receive nonforfeitable dividends before vesting are considered participating securities and, therefore, included in the calculation of earnings per share using the two-class method.  The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.  Under this method, earnings from continuing operations (or net earnings) is reduced by the amount of dividends declared, and the remaining undistributed earnings is allocated to common stock and participating securities based on the proportion of each class’s weighted average shares outstanding to the total weighted average shares outstanding.  The calculation of diluted earnings per share includes the effect of potential common shares outstanding in the average weighted shares outstanding.

Workers' Compensation Policy [Policy Text Block]

Workers’ Compensation  The Company establishes accruals for workers’ compensation claims utilizing actuarial methods to estimate the undiscounted future cash payments that will be made to satisfy the claims.  The estimates are based both on historical experience as well as current legal, economic and regulatory factors.  When claims exceed insured limits and realization of the claim for recovery is deemed probable, the Company records a receivable from the insurance company for the excess amount.  The receivable is included in other assets in the consolidated balance sheet. The Company regularly updates its estimates, and the ultimate cost of these claims may be greater than or less than the established accrual.  During 2012, due to favorable development of claims and payment data, the Company revised its estimate of the cost of outstanding workers’ compensation claims and, accordingly, reduced expense by $10.1 million.  This compares to adjustments reducing prior year workers’ compensation claims by $5.6 million in 2011 and $5.2 million in 2010.

Segment Reporting, Policy [Policy Text Block]

The Company’s segments are based on the organizational structure for which financial results are regularly evaluated by the Company’s chief operating decision maker to determine resource allocation and assess performance.  The Company’s seven reporting segments are: (1) Americas Commercial, (2) Americas Professional and Technical (“Americas PT”), (3) Europe, Middle East and Africa Commercial (“EMEA Commercial”), (4) Europe, Middle East and Africa Professional and Technical (“EMEA PT”), (5) Asia Pacific Commercial (“APAC Commercial”), (6) Asia Pacific Professional and Technical (“APAC PT”) and (7) Outsourcing and Consulting Group (“OCG”).

The Commercial business segments within the Americas, EMEA and APAC regions represent traditional office services, contact-center staffing, marketing, electronic assembly, light industrial and, in the Americas, substitute teachers.  The PT segments encompass a wide range of highly skilled temporary employees, including scientists, financial professionals, attorneys, engineers, IT specialists and healthcare workers.  OCG includes recruitment process outsourcing (“RPO”), contingent workforce outsourcing (“CWO”), business process outsourcing (“BPO”), payroll process outsourcing (“PPO”), executive placement and career transition/outplacement services.  Corporate expenses that directly support the operating units have been allocated to the Americas, EMEA and APAC regions and OCG based on a work effort, volume, or in the absence of a readily available measurement process, proportionately based on revenue from services.

The following tables present information about the reported revenue from services and gross profit of the Company by segment, along with a reconciliation to consolidated earnings before taxes, for 2012, 2011 and 2010.  Asset information by reportable segment is not presented, since the Company does not produce such information internally, nor does it use such data to manage its business.  Our segments themselves did not change from prior periods, however, effective with the first quarter of 2012, we changed the manner in which we evaluate and internally report segments, such that our primary measure of segment performance is now gross profit.  Historically, our primary measure of segment performance was gross profit less an allocation of SG&A expenses.  We revised the prior period’s segment results to conform to the current manner in which we evaluate segment performance.

	2012			2011			2010
	(In millions of dollars)
Revenue from Services:
Americas Commercial	$	2,642.4		$	2,660.9		$	2,428.2
Americas PT		1,029.7			982.8			889.0
Total Americas Commercial and PT		3,672.1			3,643.7			3,317.2
EMEA Commercial		854.6			990.1			872.0
EMEA PT		168.3			178.9			147.6
Total EMEA Commercial and PT		1,022.9			1,169.0			1,019.6
APAC Commercial		343.2			397.6			355.3
APAC PT		51.6			51.4			32.5
Total APAC Commercial and PT		394.8			449.0			387.8
OCG		396.1			317.3			254.8
Less: Intersegment revenue		(35.4	)		(28.0	)		(29.1	)
Consolidated Total	$	5,450.5		$	5,551.0		$	4,950.3

	2012			2011			2010
	(In millions of dollars)
Earnings from Operations:
Americas Commercial gross profit	$	388.2		$	375.3		$	353.6
Americas PT gross profit		159.7			147.8			139.9
Americas Region gross profit		547.9			523.1			493.5
Americas Region SG&A expenses		(405.8	)		(396.4	)		(367.9	)
Americas Region Earnings from Operations		142.1			126.7			125.6
EMEA Commercial gross profit		133.8			160.3			140.8
EMEA PT gross profit		43.0			47.4			38.7
EMEA Region gross profit		176.8			207.7			179.5
EMEA Region SG&A expenses		(168.1	)		(189.7	)		(169.9	)
EMEA Region asset impairments		-			-			(1.5	)
EMEA Region Earnings from Operations		8.7			18.0			8.1
APAC Commercial gross profit		50.1			55.7			48.4
APAC PT gross profit		21.0			20.6			13.8
APAC Region gross profit		71.1			76.3			62.2
APAC Region SG&A expenses		(73.4	)		(77.0	)		(62.5	)
APAC Region Loss from Operations		(2.3	)		(0.7	)		(0.3	)
OCG gross profit		104.0			78.8			54.1
OCG SG&A expenses		(95.4	)		(81.4	)		(71.7	)
OCG Earnings (Loss) from Operations		8.6			(2.6	)		(17.6	)
Corporate		(84.8	)		(83.7	)		(77.7	)
Consolidated Total		72.3			57.7			38.1
Other Expense, Net		3.5			0.1			5.4
Earnings From Continuing Operations Before Taxes	$	68.8		$	57.6		$	32.7

A summary of revenue from services by geographic area for 2012, 2011 and 2010 follows:

	2012		2011		2010
	(In millions of dollars)
Revenue From Services:
Domestic	$	3,464.2	$	3,445.4	$	3,121.9
International		1,986.3		2,105.6		1,828.4
Total	$	5,450.5	$	5,551.0	$	4,950.3

Foreign revenue is based on the country in which the legal subsidiary is domiciled.  No single foreign country’s revenue was material to the consolidated revenues of the Company.  Revenue from no single customer was material to the consolidated revenues of the Company.

A summary of long-lived assets information by geographic area as of year-end 2012 and 2011 follows:

	2012		2011
	(In millions of dollars)
Long-Lived Assets:
Domestic	$	72.1	$	72.9
International		17.8		17.7
Total	$	89.9	$	90.6

Long-lived assets include primarily property and equipment.  No single foreign country’s long-lived assets were material to the consolidated long-lived assets of the Company.

Other Liabilities [Member]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Accrued Payroll and Related Taxes  Included in accrued payroll and related taxes are outstanding checks in excess of funds on deposit.  Such amounts totaled $5.3 million and $6.6 million at year-end 2012 and 2011, respectively.  Payroll taxes for temporary employees are recognized proportionately to direct wages for interim periods based on expected full-year amounts.