Company: KELYB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000055135-25-000016
Chunk: 73

Company: KELLY SERVICES INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 73
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 is also affected by discrete items that may occur in any given period but are not consistent from period to period, such as tax law changes, changes in judgment regarding the realizability of deferred tax assets and the tax effects of stock compensation.The Company provides valuation allowances 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.  The Company continues to monitor its partial foreign tax credit valuation allowance for potential changes in the near term.

14. ContingenciesThe Company is continuously engaged in litigation, threatened litigation, claims, audits or investigations arising in the ordinary course of its business, such as matters alleging employment discrimination, wage and hour violations, claims for indemnification or liability, violations of privacy rights, anti-competition regulations, commercial and contractual disputes, and tax-related matters which could result in a material adverse outcome.  The Company records accruals for loss contingencies when the Company believes it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.  Such accruals are recorded in accounts payable and accrued liabilities and in accrued workers’ compensation and other claims in the consolidated balance sheet.  At first quarter-end 2025 and year-end 2024, the gross accrual for litigation costs amounted to $1.4 million and $1.5 million, respectively.The Company maintains insurance coverage which may cover certain losses.  When losses exceed the applicable policy deductible and realization of recovery of the loss from existing insurance policies is deemed probable, the Company records receivables from the insurance company for the excess amount, which are included in prepaid expenses and other current assets and other assets in the consolidated balance sheet.  At first quarter-end 2025 and year-end 2024, there were no related insurance receivables.The Company estimates the aggregate range of reasonably possible losses, in excess of amounts accrued, is $0.5 million to $2.6 million as of first quarter-end 2025.  This range includes matters where a liability has been accrued but it is reasonably possible that the ultimate loss may exceed the amount accrued and for matters where a loss is believed to be reasonably possible, but a liability has not been accrued.  The aggregate range only represents matters in which the Company is currently able to estimate a range of loss and does not represent the maximum loss exposure.  The estimated range is subject to significant judgment and a variety of assumptions and only based upon currently available information.  For other matters, the Company is currently not