XML 29 R18.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Introduction and Basis of Presentation (Policies)
6 Months Ended
Jun. 28, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Foreign Exchange

Foreign Exchange. Assets and liabilities denominated in a foreign currency are translated at the exchange rate at the end of the period. Revenue and expenses denominated in a foreign currency are translated using the average exchange rate for each period. Effective January 1, 2024, the functional currency for the Partnership's Canada subsidiaries changed prospectively from U.S. dollars to Canadian dollars due to a change in facts and economic indicators, including sustained profitability in Canada, with no material impact to the Consolidated Financial Statements. As a result, foreign exchange gains and losses from the translation of EJ Canada's financial statements into U.S. dollars are reflected on the Consolidated

Statements of Comprehensive Loss. Under the terms of the Partnership’s Twenty-Second Amended and Restated Agreement of Registered Limited Liability Limited Partnership, dated August 15, 2023 (the “Partnership Agreement”), other comprehensive income (loss) is allocated to partners, which results in no accumulated other comprehensive income on the Consolidated Statements of Financial Condition.

Profits Interests

Profits Interests. Effective January 1, 2024, the Partnership began issuing Profits Interests to certain financial advisors in the U.S., to enable them to further share in the Partnership's Net Income, as defined in the Partnership Agreement as income and other comprehensive income before allocations to partners. Profits Interests do not require a capital investment but, like limited partnership interests ("Interests"), give the holder the right to allocations and distributions of the Partnership's Net Income before allocations to subordinated limited partners and general partners. The amount of Net Income allocated to a Profits Interest holder is based on a bookkeeping measure expressed in terms of a notional U.S. dollar amount ("Notional Capital") held by such Profits Interests holder. Profits Interests have no book value, are not redeemable for any value in the future, and expire upon the earlier of the redemption of the Profits Interest or at the end of their stated term. To the extent the Partnership experiences a Net Loss for a given calendar year, as defined in the Partnership Agreement, Profits Interest holders, like limited partners, would not be allocated such Net Loss. Profits Interests have a maximum three-calendar year term from the date of issuance. Profits Interests are considered mandatorily redeemable under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 480, Distinguishing Liabilities from Equity. Undistributed Partnership Net Income allocations are included in reserve for anticipated withdrawals on the Consolidated Statements of Financial Condition until distributed. The Partnership's Net Income allocations for Profits Interests are disclosed separately on the Consolidated Statements of Income and Consolidated Statements of Changes in Partnership Capital and Profits Interests.

Profits Interests are intended to be granted annually as part of an associate recognition and retention program. The Partnership granted and issued Profits Interests for no cash consideration on January 1, 2024, to provide Profits Interest holders with allocations of Net Income based upon a $263 Notional Capital amount for the 2024 calendar year. The Profits Interests are fully vested and participate in Net Income allocations upon grant. Any future rights to allocations and distributions of the Partnership's Net Income will be forfeited upon termination of the Profits Interest. Profits Interests have zero fair value on grant date, therefore no compensation expense is recognized upon issuance or over their stated term.