Company: KELYB
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000055135-25-000080
Chunk: 15

Company: KELLY SERVICES INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 15
---
 readily determinable fair value.  The measurement alternative represents cost, less impairment, plus or minus observable price changes.  In the fourth quarter of 2024, the Company entered into a transaction to sell a portion of its shares and as a result of the sale, the value of the remaining investment was remeasured at $3.5 million as of year-end 2024.  As of third quarter-end 2025, the value of the investment was $3.5 million, representing total cost plus observable price changes to date.In the first quarter of 2025, the Company sold its 2.5% interest in PersolKelly Pte. Ltd. for cash proceeds of $6.4 million.  The investment was measured using the measurement alternative for equity investments without a readily determinable fair value and had a carrying value of $6.4 million as of year-end 2024 and at the time of the sale, representing total cost plus observable price changes to date. As a result, the sale had no impact on other income (expense), net in the consolidated statements of earnings.Assets Measured at Fair Value on a Nonrecurring BasisIn addition to assets that are recorded at fair value on a recurring basis, annual and interim impairment tests may subject the Company’s reporting units with goodwill and long-lived assets to nonrecurring fair value measurement. We perform an annual impairment test for goodwill in the fourth quarter of each year and for long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During the third quarter of 2025, we concluded that there was a triggering event due to declines in the business performance related to the MRP and Softworld reporting units as a result of dynamic macroeconomic conditions and projected growth rates were revised accordingly.  As a result of the MRP and Softworld quantitative assessments, the Company determined that both MRP and Softworld’s estimated fair value of the reporting units no longer exceeded the carrying value.  The Company recorded goodwill impairment charges of $102.0 million.These changes in circumstances were also indicators that the respective long-lived assets may not be recoverable.  The Company performed long-lived asset recoverability tests for MRP and Softworld and determined that undiscounted future cash flows exceeded the carrying amount of the asset groups and were recoverable.The various inputs to the fair value models are considered level 3.  The Company engaged third-party valuation specialists and used industry-accepted valuation models and