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Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Nov. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation Basis of Presentation
The accompanying Consolidated Financial Statements have been
prepared in accordance with U.S. generally accepted accounting
principles (“U.S. GAAP”) for financial information.
We have made a number of estimates and assumptions relating
to the reporting of assets and liabilities, the disclosure of
contingent assets and liabilities and the reported amounts of
revenues and expenses during the reporting period to prepare
these consolidated financial statements in conformity with U.S.
GAAP. The most important of these estimates and assumptions
relate to fair value measurements, compensation and benefits,
goodwill and intangible assets and the accounting for income
taxes. Although these and other estimates and assumptions are
based on the best available information, actual results could be
materially different from these estimates.
Consolidation Consolidation
Our policy is to consolidate all entities that we control by
ownership of a majority of the outstanding voting stock. In
addition, we consolidate entities that meet the definition of a
variable interest entity (“VIE”) for which we are the primary
beneficiary. The primary beneficiary is the party who has the
power to direct the activities of a VIE that most significantly
impact the entity’s economic performance and who has an
obligation to absorb losses of the entity or a right to receive
benefits from the entity that could potentially be significant to the
entity. For consolidated entities that are less than wholly-owned,
the third-party’s holding of equity interest is presented as
Noncontrolling interests in our Consolidated Statements of
Financial Condition and Consolidated Statements of Changes in
Equity. The portion of net earnings attributable to the
noncontrolling interests is presented as Net earnings (losses)
attributable to noncontrolling interests in our Consolidated
Statements of Earnings.
In situations in which we have significant influence, but not
control, of an entity that does not qualify as a VIE, we apply either
the equity method of accounting or fair value accounting
pursuant to the fair value option election under U.S. GAAP, with
our portion of net earnings or gains and losses recorded in Other
revenues or Principal transactions revenues, respectively. We
also have formed nonconsolidated investment vehicles with
third-party investors that are typically organized as partnerships
or limited liability companies and are carried at fair value. We act
as general partner or managing member for these investment
vehicles and have generally provided the third-party investors
with termination or “kick-out” rights.
Intercompany accounts and transactions are eliminated in
consolidation.
Revenue Recognition Policies Revenue Recognition Policies
Commissions and Other Fees. All customer securities
transactions are reported in our Consolidated Statements of
Financial Condition on a settlement date basis with related
income reported on a trade-date basis. We permit institutional
customers to allocate a portion of their gross commissions to
pay for research products and other services provided by third
parties. The amounts allocated for those purposes are commonly
referred to as soft dollar arrangements. These arrangements are
accounted for on an accrual basis and, as we are acting as an
agent in these arrangements, netted against commission
revenues. In addition, we earn asset-based fees associated with
the management and supervision of assets, account services and
administration related to customer accounts. We also earn
commissions on execution services provided to customers in
facilitating foreign currency spot trades and prime brokerage
services.
Principal Transactions. Financial instruments owned and
Financial instruments sold, not yet purchased are carried at fair
value with gains and losses reflected in Principal transactions
revenues, except for derivatives accounted for as hedges (refer
to “Hedge Accounting” section herein and Note 7, Derivative
Financial Instruments). Fees received on loans carried at fair
value are also recorded in Principal transactions revenues. 
Investment Banking. Advisory fees from mergers and acquisitions
engagements are recognized at a point in time when the related
transaction is completed. Advisory retainer fees from
restructuring engagements are recognized over time using a time
elapsed measure of progress. Expenses associated with
investment banking advisory engagements are deferred only to
the extent they are explicitly reimbursable by the client and the
related revenue is recognized at a point in time. All other
investment banking advisory related expenses, including
expenses incurred related to restructuring advisory engagements,
are expensed as incurred. All investment banking advisory
expenses are recognized within their respective expense
category on the Consolidated Statements of Earnings and any
expenses reimbursed by clients are recognized as Investment
banking revenues. 
Underwriting and placement agent revenues are recognized at a
point in time on trade-date. Costs associated with underwriting
activities are deferred until the related revenue is recognized or
the engagement is otherwise concluded and are recorded on a
gross basis within Underwriting costs.
Asset Management Fees and Revenues. Asset management fees
and revenues consist of asset management fees, as well as
revenues from strategic affiliates pursuant to arrangements,
which entitle us to portions of the revenues and/or profits of the
affiliated managers and perpetual rights to certain defined
revenues for a given revenue share period. Revenue from
strategic affiliates pursuant to such arrangements is recognized
at the end of the defined revenue or profit share period when the
revenues have been realized and all contingencies have been
resolved.
Management and administrative fees are generally recognized
over the period that the related service is provided. Performance
fee revenue is generally recognized only at the end of the
performance period to the extent that the benchmark return has
been met.
Interest Revenue and Expense. We recognize contractual interest
on Financial instruments owned and Financial instruments sold,
not yet purchased, on an accrual basis as a component of
interest revenue and expense. Interest flows on derivative trading
transactions and dividends are included as part of the fair
valuation of these contracts and recognized in Principal
transactions revenues rather than as a component of interest
revenue or expense. We account for our short- and long-term
borrowings at amortized cost, except for those for which we have
elected the fair value option, with related interest recorded on an
accrual basis as Interest expense. Discounts/premiums arising
on our long-term debt are accreted/amortized to Interest expense
using the effective yield method over the remaining lives of the
underlying debt obligations. We recognize interest revenue
related to our securities borrowed and securities purchased
under agreements to resell activities and interest expense related
to our securities loaned and securities sold under agreements to
repurchase activities on an accrual basis. In addition, we
recognize interest income as earned on brokerage customer
margin balances and interest expense as incurred on credit
balances.
Other Revenues. Other revenues include revenue from the sale of
manufactured or remanufactured lumber for which the
transaction price is fixed at the time of sale and revenue is
generally recognized when the customer takes control of the
product. Other revenues also include revenue from the sale of
produced oil and gas and revenue from the sale of real estate.
Contracts for revenue from the sale of produced oil and gas
typically include variable consideration based on monthly pricing
tied to local indices and volumes and revenue is recorded at the
point in time when control of the produced oil and gas transfers
to the customer, which is when the performance obligation is
satisfied and the variable consideration can be reliably estimated
at the end of each month. Revenues from the sales of real estate
are recognized at a point in time when the related transaction is
complete. If performance obligations under the contract with a
customer related to a parcel of real estate are not yet complete
when title transfers to the buyer, revenue associated with the
incomplete performance obligations is deferred until the
performance obligation is completed. Revenues from internet
connection services are recognized based on volume based
pricing and revenue from activating broadband services are
recognized on a straight-line basis over a two year period. Fees
related to selling and licensing information and data to clients is
recognized ratably over the related contract service period.
Cash Equivalents Cash Equivalents
Cash equivalents include highly liquid investments, including
money market funds and certificates of deposit, not held for
resale with original maturities of three months or less.
Cash and Securities Segregated and on Deposit for Regulatory Purposes or Deposited With Clearing and Depository Organizations Cash and Securities Segregated and on Deposit for Regulatory
Purposes or Deposited with Clearing and Depository
Organizations
In accordance with Rule 15c3-3 of the Securities Exchange Act of
1934, Jefferies LLC as a broker-dealer carrying client accounts, is
subject to requirements related to maintaining cash or qualified
securities in a segregated reserve account for the exclusive
benefit of its clients. Certain other entities are also obligated by
rules mandated by their primary regulators to segregate or set
aside cash or equivalent securities to satisfy regulations,
promulgated to protect customer assets. In addition, certain
exchange and/or clearing organizations require cash and/or
securities to be deposited by us to conduct day-to-day activities.
Amounts may also include cash and cash equivalents that are
restricted for other business purposes.
Financial Instruments and Fair Value Financial Instruments and Fair Value
Financial instruments owned and Financial instruments sold, not
yet purchased are recorded at fair value, either as required by
accounting pronouncements or through the fair value option
election. These instruments primarily represent our trading
activities and include both cash and derivative products. Our
derivative products are acquired or originated for trading
purposes and are included within operating activities on our
Consolidated Statements of Cash Flows. Gains and losses are
recognized in Principal transactions revenues. The fair value of a
financial instrument is the amount that would be received to sell
an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date (the exit
price).
In determining fair value, we maximize the use of observable
inputs and minimize the use of unobservable inputs by requiring
that observable inputs be used when available. Observable inputs
are inputs that market participants would use in pricing the asset
or liability based on market data obtained from independent
sources. Unobservable inputs reflect our assumptions that
market participants would use in pricing the asset or liability
developed based on the best information available in the
circumstances. We apply a hierarchy to categorize our fair value
measurements broken down into three levels based on the
transparency of inputs as follows:
Level 1:
Quoted prices are available in active markets for
identical assets or liabilities at the reported date.
Valuation adjustments and block discounts are not
applied to Level 1 instruments.
Level 2:
Pricing inputs other than quoted prices in active
markets, which are either directly or indirectly
observable at the reported date. The nature of these
financial instruments include cash instruments for
which quoted prices are available but traded less
frequently, derivative instruments for which fair values
have been derived using model inputs that are directly
observable in the market, or can be derived principally
from, or corroborated by, observable market data, and
financial instruments that are fair valued by reference
to other similar financial instruments, the parameters
of which can be directly observed.
Level 3:
Instruments that have little to no pricing observability
at the reported date. These financial instruments are
measured using management’s best estimate of fair
value, where the inputs into the determination of fair
value require significant management judgment or
estimation.
Certain financial instruments have bid and ask prices that can be
observed in the marketplace. For financial instruments whose
inputs are based on bid-ask prices, the financial instrument is
valued at the point within the bid-ask range that meets our best
estimate of fair value. We use prices and inputs that are current
at the measurement date. For financial instruments that do not
have readily determinable fair values using quoted market prices,
the determination of fair value is based on the best available
information, taking into account the types of financial
instruments, current financial information, restrictions (if any) on
dispositions, fair values of underlying financial instruments and
quotations for similar instruments.
The valuation of financial instruments may include the use of
valuation models and other techniques. Adjustments to
valuations derived from valuation models are permitted based on
management’s judgment, which takes into consideration the
features of the financial instrument such as its complexity, the
market in which the financial instrument is traded and underlying
risk uncertainties about market conditions. Adjustments from the
price derived from a valuation model reflect management’s
judgment that other participants in the market for the financial
instrument being measured at fair value would also consider in
valuing that same financial instrument. To the extent that
valuation is based on models or inputs that are less observable
or unobservable in the market, the determination of fair value
requires more judgment.
The availability of observable inputs can vary and is affected by a
wide variety of factors, including, for example, the type of
financial instrument and market conditions. As the observability
of prices and inputs may change for a financial instrument from
period to period, this condition may cause a transfer of an
instrument among the fair value hierarchy levels. The degree of
judgment exercised in determining fair value is greatest for
instruments categorized within Level 3.
Securities Borrowed and Securities Loaned Securities Borrowed and Securities Loaned
Securities borrowed and securities loaned are carried at the
amounts of cash collateral advanced and received in connection
with the transactions and accounted for as collateralized
financing transactions. In connection with both trading and
brokerage activities, we borrow securities to cover short sales
and to complete transactions in which customers have failed to
deliver securities by the required settlement date and lend
securities to other brokers and dealers for similar purposes.
When we borrow securities, we generally provide cash to the
lender as collateral, which is reflected in our Consolidated
Statements of Financial Condition as Securities borrowed. We
earn interest revenues on this cash collateral. Similarly, when we
lend securities to another party, that party provides cash to us as
collateral, which is reflected in our Consolidated Statements of
Financial Condition as Securities loaned. We pay interest expense
on the cash collateral received from the party borrowing the
securities. The initial collateral advanced or received
approximates or is greater than the fair value of the securities
borrowed or loaned. We monitor the fair value of the securities
borrowed and loaned on a daily basis and request additional
collateral or return excess collateral, as appropriate. In instances
where the Company receives securities as collateral in
connection with securities-for-securities transactions in the
which the Company is the lender of securities and is permitted to
sell or repledge the securities received as collateral, the Company
reports the fair value of the collateral received and the related
obligation to return the collateral in the Company’s Consolidated
Statements of Financial Condition.
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities Purchased Under Agreements to Resell and Securities
Sold Under Agreements to Repurchase
Securities purchased under agreements to resell and Securities
sold under agreements to repurchase (collectively “repos”) are
accounted for as collateralized financing transactions and are
recorded at their contracted resale or repurchase amount plus
accrued interest. We earn and incur interest over the term of the
repo, which is reflected in Interest revenue and Interest expense
on an accrual basis. Repos are presented in our Consolidated
Statements of Financial Condition on a net-basis by counterparty,
where permitted by U.S. GAAP. We monitor the fair value of the
underlying securities daily versus the related receivable or
payable balances. Should the fair value of the underlying
securities decline or increase, additional collateral is requested or
excess collateral is returned, as appropriate.
Offsetting of Derivative Financial Instruments and Securities Financing Agreements Offsetting of Derivative Financial Instruments and Securities
Financing Agreements
To manage our exposure to credit risk associated with our
derivative activities and securities financing transactions, we may
enter into International Swaps and Derivative Association, Inc.
(“ISDA”) master netting agreements, master securities lending
agreements, master repurchase agreements or similar
agreements and collateral arrangements with counterparties. A
master agreement creates a single contract under which all
transactions between two counterparties are executed allowing
for trade aggregation and a single net payment obligation. Master
agreements provide protection in bankruptcy in certain
circumstances and, where legally enforceable, enable receivables
and payables with the same counterparty to be settled or
otherwise eliminated by applying amounts due against all or a
portion of an amount due from the counterparty or a third-party.
Under our ISDA master netting agreements, we typically also
execute credit support annexes, which provide for collateral,
either in the form of cash or securities, to be posted by or paid to
a counterparty based on the fair value of the derivative receivable
or payable based on the rates and parameters established in the
credit support annex.
In the event of the counterparty’s default, provisions of the
master agreement permit acceleration and termination of all
outstanding transactions covered by the agreement such that a
single amount is owed by, or to, the non-defaulting party. In
addition, any collateral posted can be applied to the net
obligations, with any excess returned; and the collateralized party
has a right to liquidate the collateral. Any residual claim after
netting is treated along with other unsecured claims in
bankruptcy court.
The conditions supporting the legal right of offset may vary from
one legal jurisdiction to another and the enforceability of master
netting agreements and bankruptcy laws in certain countries or in
certain industries is not free from doubt. The right of offset is
dependent both on contract law under the governing
arrangement and consistency with the bankruptcy laws of the
jurisdiction where the counterparty is located. Industry legal
opinions with respect to the enforceability of certain standard
provisions in respective jurisdictions are relied upon as a part of
managing credit risk. In cases where we have not determined an
agreement to be enforceable, the related amounts are not offset.
Master netting agreements are a critical component of our risk
management processes as part of reducing counterparty credit
risk and managing liquidity risk.
We are also a party to clearing agreements with various central
clearing parties. Under these arrangements, the central clearing
counterparty facilitates settlement between counterparties based
on the net payable owed or receivable due and, with respect to
daily settlement, cash is generally only required to be deposited
to the extent of the net amount. In the event of default, a net
termination amount is determined based on the market values of
all outstanding positions and the clearing organization or clearing
member provides for the liquidation and settlement of the net
termination amount among all counterparties to the open
contracts or transactions.
Securitization Activities Securitization Activities
We engage in securitization activities related to corporate loans,
consumer loans, mortgage loans and mortgage-backed and other
asset-backed securities. Transfers of financial assets to secured
funding vehicles are accounted for as sales when we have
relinquished control over the transferred assets. The gain or loss
on sale of such financial assets depends, in part, on the previous
carrying amount of the assets involved in the transfer allocated
between the assets sold and the retained interests, if any, based
upon their respective fair values at the date of sale. We may
retain interests in the securitized financial assets as one or more
tranches of the securitization. These retained interests are
included in Financial instruments owned, at fair value. Any
changes in the fair value of such retained interests are
recognized in Principal transactions revenues.
When a transfer of assets does not meet the criteria of a sale, we
account for the transfer as a secured borrowing and continue to
recognize the assets of a secured borrowing in Financial
instruments owned and recognize the associated financing in
Other secured financings.
Investments and in Loans to Related Parties Investments in and Loans to Related Parties
Investments in and loans to related parties include investments
in private equity and other operating entities in which we exercise
significant influence over operating and capital decisions and
loans issued in connection with such activities. Investments in
and loans to related parties are accounted for using the equity
method or at cost, as appropriate, and reviewed for impairment
when changes in circumstances may indicate a decrease in value
which is other than temporary. Revenues on Investments in and
loans to related parties are included in Other revenues.
Credit Losses Credit Losses
Financial assets measured at amortized cost are presented at
the net amount expected to be collected and the measurement of
credit losses and any expected increases in expected credit
losses are recognized in earnings. The estimate of expected
credit losses involves judgment and is based on an assessment
over the life of the financial instrument taking into consideration
current market conditions and reasonable and supportable
forecasts of expected future economic conditions.
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill. Goodwill represents the excess acquisition cost over
the fair value of net tangible and intangible assets
acquired. Goodwill is not amortized and is subject to annual
impairment testing on August 1 for our Investment Banking,
Fixed Income, Equities and Asset Management reporting units,
on November 30 for other identified reporting units or between
annual tests if an event or change in circumstance occurs that
would more likely than not reduce the fair value of a reporting
unit below its carrying value. The goodwill impairment test is
performed at the reporting unit level by comparing the estimated
fair value of a reporting unit with its respective carrying value,
including goodwill and allocated intangible assets. If the
estimated fair value exceeds the carrying value, goodwill at the
reporting unit level is not impaired. If the fair value is less than
the carrying value, then an impairment loss is recognized for the
amount by which the carrying value of the reporting unit exceeds
the reporting unit’s fair value.
The fair value of reporting units is based on widely accepted
valuation techniques that we believe market participants would
use, although the valuation process requires significant judgment
and often involves the use of significant estimates and
assumptions. The methodologies we utilize in estimating the fair
value of reporting units include market valuation methods that
incorporate price-to-earnings and price-to-book multiples of
comparable exchange-traded companies and multiples of merger
and acquisitions of similar businesses and/or projected cash
flows. The estimates and assumptions used in determining fair
value could have a significant effect on whether or not an
impairment charge is recorded and the magnitude of such a
charge. Adverse market or economic events could result in
impairment charges in future periods.
Intangible Assets. Intangible assets deemed to have finite lives
are amortized on a straight-line basis over their estimated useful
lives, where the useful life is the period over which the asset is
expected to contribute directly, or indirectly, to our future cash
flows. Intangible assets are reviewed for impairment on an
interim basis when certain events or circumstances exist. For
intangible assets deemed to be impaired, an impairment loss is
recognized for the amount by which the intangible asset’s
carrying value exceeds its fair value. At least annually, the
remaining useful life is evaluated.
An intangible asset with an indefinite useful life is not amortized
but assessed for impairment annually, or more frequently, when
events or changes in circumstances occur indicating that it is
more likely than not that the indefinite-lived asset is impaired.
Impairment exists when the carrying amount exceeds its fair
value. In testing for impairment, we have the option to first
perform a qualitative assessment to determine whether it is more
likely than not that an impairment exists. If it is determined that it
is not more likely than not that an impairment exists, a
quantitative impairment test is not necessary. If we conclude
otherwise, we are required to perform a quantitative impairment
test.
Intangible assets are included in Other assets. Our annual
indefinite-lived intangible asset impairment testing date is August
1. To the extent an impairment loss is recognized, the loss
establishes the new cost basis of the asset that is amortized over
the remaining useful life of that asset, if any. Subsequent reversal
of impairment losses is not permitted.
Premises and Equipment Premises and Equipment
Premises and equipment consist of leasehold improvements,
furniture, fixtures, computer and communications equipment,
capitalized software (externally purchased and developed for
internal use) and owned aircraft. Furniture, fixtures, computer and
communications equipment, capitalized software are
depreciated using the straight-line method over the estimated
useful lives of the related assets (generally three to ten years).
Leasehold improvements are amortized using the straight-line
method over the term of the related leases or the estimated
useful lives of the assets, whichever is shorter. The carrying
values of internally developed software ready for its intended use
are depreciated over the remaining useful life of each capitalized
software.
Leases Leases
For leases with an original term longer than one year, lease
liabilities are initially recognized on the lease commencement
date based on the present value of the future minimum lease
payments over the lease term, including non-lease components
such as fixed common area maintenance costs and other fixed
costs for generally all leases. A corresponding right-of-use
(“ROU”) asset is initially recognized equal to the lease liability
adjusted for any lease prepayments, initial direct costs and lease
incentives. The ROU assets are included within Premises and
equipment on our Consolidated Statements of Financial
Condition. The ROU assets are amortized over the lease term and
is included in Occupancy and equipment rental in our Statements
of Consolidated Earnings and Other adjustments in our
Consolidated Statements of Cash Flows.
The discount rates used in determining the present value of
leases represent our collateralized borrowing rate considering
each lease’s term and currency of payment. The lease term
includes options to extend or terminate the lease when it is
reasonably certain that we will exercise that option. Certain
leases have renewal options that can be exercised at the
discretion of the Company. Lease expense is generally
recognized on a straight-line basis over the lease term and
included in Occupancy and equipment rental expense.
Other Real Estate Other Real Estate
Other real estate is classified within Other assets and includes all
expenditures incurred in connection with the acquisition,
development and construction of properties. Interest, payroll
related to construction, property taxes and other professional
fees attributable to land and property construction are capitalized
and added to the cost of those properties when active
development begins and ends when the property development is
fully completed and ready for its intended use.
Inventories and Cost of Sales Inventories and Cost of Sales
We have investments in entities that are consolidated by us that
are engaged in real estate activities and, prior to the sale of Idaho
Timber during the year ended November 30, 2022, were engaged
in manufacturing activities. Inventories arising from these
consolidated entities are classified as Other assets and are
stated at the lower of cost or net realizable value, with cost
principally determined under the first-in-first-out method. Cost of
goods sold, which is recognized within Non-interest expenses in
connection with sales of such inventories, principally includes
product and manufacturing costs, inbound and outbound
shipping costs and handling costs.
Impairment of Long-Lived Assets Impairment of Long-Lived Assets
We evaluate our long-lived assets for impairment whenever
events or changes in circumstances indicate, in management’s
judgment, that the carrying value of such assets may not be
recoverable. When testing for impairment, we group our long-
lived assets with other assets and liabilities at the lowest level for
which identifiable cash flows are largely independent of the cash
flows of other assets and liabilities (or asset group). The
determination of whether an asset group is recoverable is based
on management’s estimate of undiscounted future cash flows
directly attributable to the asset group as compared to its
carrying value. If the carrying amount of the asset group is
greater than the undiscounted cash flows, an impairment loss
would be recognized for the amount by which the carrying
amount of the asset group exceeds its estimated fair value.
Assets Held For Sale Assets Held for Sale
We classify assets and related liabilities as held for sale when: (i)
management has committed to a plan to sell the assets, (ii) the
net assets are available for immediate sale, (iii) there is an active
program to locate a buyer and (iv) the sale and transfer of the net
assets is probable within one year. Assets and liabilities held for
sale generally are presented separately on our Consolidated
Statements of Financial Condition with a valuation allowance, if
necessary, to recognize the net carrying amount at the lower of
cost or fair value, less costs to sell. Depreciation of property,
plant and equipment and amortization of finite-lived intangible
assets and right-of-use assets are not recorded while these
assets are classified as held for sale. For each period that assets
are classified as being held for sale, they are tested for
recoverability.
Share-based Compensation Share-based Compensation
Share-based awards are measured based on the fair value of the
award and recognized over the required service or vesting period.
Certain executive and employee share-based awards contain
market, performance and/or service conditions. Market
conditions are incorporated into the grant-date fair value using a
Monte Carlo valuation model. Compensation expense for awards
with market conditions is recognized over the service period and
is not reversed if the market condition is not met. Awards with
performance conditions are amortized over the service period if it
is determined that it is probable that the performance condition
will be achieved. The fair value of options is estimated at the date
of grant using the Black-Scholes option pricing model. We
account for forfeitures as they occur, which results in dividends
and dividend equivalents originally charged against retained
earnings for forfeited shares to be reclassified to compensation
expense in the period in which the forfeiture occurs.
Income Taxes Income Taxes
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and for tax loss
carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to
be recovered or settled. The effect of a change in tax rates on
deferred tax assets and liabilities is recognized in income in the
period that includes the enactment date. The realization of
deferred tax assets is assessed and a valuation allowance is
recorded to the extent that it is more likely than not that any
portion of the deferred tax asset will not be realized on the basis
of its projected tax return results.
We record uncertain tax positions using a two-step process:
(i) we determine whether it is more likely than not that each tax
position will be sustained on the basis of the technical merits of
the position; and (ii) for those tax positions that meet the more-
likely-than-not recognition threshold, we recognize the largest
amount of tax benefit that is more than 50 percent likely to be
realized upon ultimate settlement with the related tax authority.
We use the portfolio approach relating to the release of stranded
tax effects recorded in accumulated other comprehensive
income (loss).
Earnings per Common Share Earnings per Common Share
Basic earnings per share is calculated using the two-class
method and is computed by dividing net earnings available to
common shareholders by the weighted average number of
common shares outstanding and certain other shares committed
to be, but not yet issued. Net earnings available to common
shareholders represent net earnings to common shareholders
reduced by the allocation of earnings to participating
securities. Losses are not allocated to participating
securities. Common shares outstanding and certain other shares
committed to be, but not yet issued, include restricted stock and
restricted stock units (“RSUs”) for which no future service is
required. 
Diluted earnings per share is calculated using the two-class
method using the treasury stock or if-converted method, with the
more dilutive amount being reported. Diluted earnings per share
is computed by taking the sum of net earnings available to
common shareholders, dividends on preferred shares and
dividends on dilutive mandatorily redeemable convertible
preferred shares, divided by the weighted average number of
common shares outstanding and certain other shares committed
to be, but not yet issued, plus all dilutive common stock
equivalents outstanding during the period.
Preferred shares and unvested share-based payment awards that
contain nonforfeitable rights to dividends or dividend equivalents
(whether paid or unpaid) are participating securities and,
therefore, are included in the earnings allocation in computing
earnings per share under the two-class method of earnings per
share. Restricted stock and RSUs granted as part of share-based
compensation contain nonforfeitable rights to dividends and
dividend equivalents, respectively, and therefore, prior to the
requisite service being rendered for the right to retain the award,
restricted stock and RSUs meet the definition of a participating
security. RSUs granted under the senior executive compensation
plan are not considered participating securities as the rights to
dividend equivalents are forfeitable. Refer to Note 15,
Compensation Plans for more information regarding the senior
executive compensation plan.
Legal Reserves Legal Reserves
In the normal course of business, we have been named, from
time to time, as a defendant in legal and regulatory proceedings.
We are also involved, from time to time, in other exams,
investigations and similar reviews (both formal and informal) by
governmental and self-regulatory agencies regarding our
businesses, certain of which may result in judgments,
settlements, fines, penalties or other injunctions.
We recognize a liability for a contingency in Accrued expenses
and other liabilities when it is probable that a liability has been
incurred and the amount of loss can be reasonably estimated. If
the reasonable estimate of a probable loss is a range, we accrue
the most likely amount of such loss, and if such amount is not
determinable, then we accrue the minimum in the range as the
loss accrual. The determination of the outcome and loss
estimates requires significant judgment on the part of
management. We believe that any other matters for which we
have determined a loss to be probable and reasonably estimable
are not material to our consolidated financial statements.
In many instances, it is not possible to determine whether any
loss is probable or even possible or to estimate the amount of
any loss or the size of any range of loss. We believe that, in the
aggregate, the pending legal actions or regulatory proceedings
and any other exams, investigations or similar reviews (both
formal and informal) should not have a material adverse effect
on our consolidated results of operations, cash flows or financial
condition. In addition, we believe that any amount of potential
loss or range of potential loss in excess of what has been
provided in our consolidated financial statements that could be
reasonably estimated is not material.
Hedge Accounting Hedge Accounting
Hedge accounting is applied using interest rate swaps
designated as fair value hedges of changes in the benchmark
interest rate of fixed rate senior long-term debt. The interest rate
swaps are included as derivative contracts in Financial
instruments owned and Financial instruments sold, not yet
purchased. We use regression analysis to perform ongoing
prospective and retrospective assessments of the effectiveness
of these hedging relationships. A hedging relationship is deemed
effective if the change in fair value of the interest rate swap and
the change in the fair value of the long-term debt due to changes
in the benchmark interest rate offset within a range of 80% -
125%. The impact of valuation adjustments related to our own
credit spreads and counterparty credit spreads are included in
the assessment of effectiveness.
For qualifying fair value hedges of benchmark interest rates, the
change in the fair value of the derivative and the change in fair
value of the long-term debt provide offset of one another and,
together with any resulting ineffectiveness, are recorded in
Interest expense.
We seek to reduce the impact of fluctuations in foreign exchange
rates on our net investments in certain non-U.S. operations
through the use of foreign exchange contracts. The foreign
exchange contracts are included as derivative contracts in
Financial instruments owned and Financial instruments sold, not
yet purchased. For foreign exchange contracts designated as
hedges, the effectiveness of the hedge is assessed based on the
overall changes in the fair value of the forward contracts (i.e.,
based on changes in forward rates). For qualifying net
investment hedges, all gains or losses on the hedging
instruments are included in Currency translation adjustments and
other in our Consolidated Statements of Comprehensive Income.
Foreign Currency Translation Foreign Currency Translation
Assets and liabilities of foreign subsidiaries having non-U.S.
dollar functional currencies are translated at exchange rates at
the end of a period. Revenues and expenses are translated at
average exchange rates during the period. The gains or losses
resulting from translating foreign currency financial statements
into U.S. dollars, net of hedging gains or losses and taxes, if any,
are included in Other comprehensive income. Gains or losses
resulting from foreign currency transactions are included in
Principal transactions revenues.
Accounting Standards to be Adopted in Future Periods and Adopted Accounting Standards Accounting Standards to be Adopted in Future Periods
Segment Reporting. In November 2023, the Financial Accounting
Standards Board (“FASB”) issued ASU No. 2023-07 (“ASU
2023-07”), Improvements to Reportable Segment Disclosures.
The guidance primarily will require enhanced disclosures about
significant segment expenses. The amendments in ASU 2023-07
are effective for fiscal years beginning after December 15, 2023,
and interim periods within fiscal years beginning after December
15, 2024, with early adoption permitted, and are to be applied on
a retrospective basis. We are evaluating the impact of the
standard on our segment reporting disclosures.
Income Taxes. In December 2023, the FASB issued ASU No.
2023-09 (“ASU 2023-09”), Improvements to Income Tax
Disclosures. The guidance is intended to improve income tax
disclosure requirements by requiring (i) consistent categories
and greater disaggregation of information in the rate
reconciliation and (ii) the disaggregation of income taxes paid by
jurisdiction. The guidance makes several other changes to the
income tax disclosure requirements. The amendments in ASU
2023-09 are effective for fiscal years beginning after December
15, 2024, with early adoption permitted, and are required to be
applied prospectively with the option of retrospective application.
We are evaluating the impact of the standard on our income tax
disclosures.
Expenses. In November 2024, the FASB issued ASU No. 2024-03
(“ASU 2024-03”), Disaggregation of Income Statement Expenses.
The guidance primarily will require enhanced disclosures about
certain types of expenses. The amendments in ASU 2024-03 are
effective for fiscal years beginning after December 15, 2026, and
interim periods within fiscal years beginning after December 15,
2027 and may be applied either on a prospective or retrospective
basis. We are evaluating the impact of the standard on our
disclosures.
Adopted Accounting Standards
Reference Rate Reform. The FASB issued guidance which
provides optional exceptions for applying U.S. GAAP to certain
contract modifications, hedge accounting relationships or other
transactions affected by reference rate reform. There was no
impact to our financial statements as a result of this guidance
upon the completion of our transition away from the London
Interbank Offered Rate (“LIBOR”) on June 30, 2023.
Financial Instruments—Credit Losses. In June 2016, the FASB
issued ASU No. 2016-13, Measurement of Credit Losses on
Financial Instruments. The guidance provides for estimating
credit losses on financial assets measured at amortized cost by
introducing an approach based on expected losses over the
financial asset’s entire life, recorded at inception or purchase. On
January 1, 2023, Berkadia, our equity method investee, adopted
this guidance and applied a modified retrospective approach
through a cumulative-effect adjustment to retained earnings
upon adoption, which resulted in a decrease in retained earnings
of $14.8 million, net of tax attributable to an increase in the
allowance for credit losses. Our equity method investee, Jefferies
Finance, adopted the guidance on December 1, 2023, and the
impact on our consolidated financial statements was not
material.