Company: ADP
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000008670-25-000047
Chunk: 80

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 8
Chunk 80
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 clients, as invoicing occurs in the period the services are provided. Therefore, the Company does not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing.Changes in deferred revenues related to set up fees for the three months ended September 30, 2025 were as follows:Contract LiabilityContract liability, July 1, 2025$520.2 Recognition of revenue included in beginning of year contract liability(31.0)Contract liability, net of revenue recognized on contracts during the period30.1 Currency translation adjustments1.3 Contract liability, September 30, 2025$520.6 

Note 4. Acquisition

In October 2024, the Company acquired WorkForce Software, a premier workforce management solutions provider that specializes in supporting large, global enterprises, utilizing cash on hand. The results of WorkForce Software are reported within the Company’s Employer Services segment. Pro forma information has not been presented because the effect of the acquisition is not material to the Company's consolidated financial results.The following table reconciles the purchase price to the cash paid for the acquisition, net of cash acquired:Purchase price$1,170.8 Less: cash acquired(12.5)Cash paid for acquisition of business, net of cash acquired$1,158.3 

9

The acquisition was accounted for using the acquisition method of accounting. The Company recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess recorded to goodwill. The purchase price allocation for WorkForce Software is as follows:Cash$12.5 Accounts receivable, net of allowance for doubtful accounts20.0 Identifiable intangible assets (1)292.0 Goodwill885.8 Deferred income taxes, net of valuation allowance45.9 All other assets14.8 Total assets acquired$1,271.0 Deferred revenue$39.6 All other liabilities60.6 Total liabilities assumed$100.2 Total net assets acquired$1,170.8 (1)  Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes an estimated valuation by an independent third party. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used in arriving at the estimated identifiable intangible asset values included management’s estimates of future cash flows, discounted at an