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Investment in PersolKelly Pte Ltd.
3 Months Ended
Apr. 04, 2021
Equity Method Investments and Joint Ventures [Abstract]  
Investment in PersolKelly Pte Ltd. Investment in PersolKelly Pte. Ltd.
The Company has a 49% ownership interest in the JV (see Investment in Persol Holdings footnote above), a staffing services business operating in ten geographies in the Asia-Pacific region. The operating results of the Company’s interest in the JV are accounted for on a one-quarter lag under the equity method and are reported in equity in net earnings (loss) of affiliate in the consolidated statements of earnings, which amounted to a loss of $1.1 million in the first quarter of 2021 and a loss of $1.5 million in the first quarter of 2020. This investment is evaluated for indicators of impairment on a quarterly basis or whenever events or circumstances indicate the carrying amount may be other-than-temporarily impaired. If we conclude that there is an other-than-temporary impairment of this equity investment, we will adjust the carrying amount of the investment to the current fair value.
The investment in equity affiliate on the Company’s consolidated balance sheet totaled $118.7 million as of first quarter-end 2021 and $118.5 million as of year-end 2020. The net amount due from the JV, a related party, was $5.2 million as of the first quarter-end 2021 and $5.6 million as of year-end 2020. The Company made loans in prior years, proportionate to its 49% ownership, to the JV to fund working capital requirements as a result of their sustained revenue growth. As of first quarter-end 2021, the outstanding loan balance is $5.8 million and is recorded in prepaid expenses and other current assets in the consolidated balance sheet and included in the net amounts due from the JV. The carrying value of the loan approximates the fair value based on market interest rates. The allowance for credit losses related to the loan is not material as of the first quarter-end 2021. The Company received payment from the JV for the remaining balance of the loan in April 2021. Accrued interest receivable, which is included in prepaid expenses and other current assets in the consolidated balance sheet, was not material at first quarter-end 2021 and year-end 2020. The JV is a supplier to certain MSP programs in the region and the
amounts for services provided to the Company, which are included in accounts payable and accrued liabilities in the consolidated balance sheet, are not material.