Property, Plant and Equipment Accounting Policy
Property, plant and equipment is stated at cost, less accumulated depreciation and is depreciated using the straight-line method. The estimated useful lives of the assets are generally as follows:
- factories and office buildings: 30 to 40 years,
- other facilities: 15 years,
- machinery and equipment: 3 to 15 years,
- furniture and office equipment: 3 to 8 years,
- leasehold improvements are depreciated over their estimated useful life or, for operating leases, over the lease term, if shorter.
Source: ABB Ltd., Annual Report
Property, Plant and Equipment Disclosure
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ABB Ltd., Statement of Financial Position, Property, Plant and Equipment
Source: Based on data from ABB Ltd. Annual Reports
| Item |
Description |
The company |
| Machinery and equipment |
Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. |
ABB Ltd.'s machinery and equipment increased from 2009 to 2010 and from 2010 to 2011.
|
| Construction in progress |
Carrying amount at the balance sheet date of long-lived asset under construction that include construction costs to date on capital projects that have not been completed and assets being constructed that are not ready to be placed into service. |
ABB Ltd.'s construction in progress declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
| Property, plant and equipment, gross |
Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation. |
ABB Ltd.'s property, plant and equipment, gross increased from 2009 to 2010 and from 2010 to 2011.
|
| Property, plant and equipment, net |
Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment. |
ABB Ltd.'s property, plant and equipment, net increased from 2009 to 2010 and from 2010 to 2011.
|
Property, Plant and Equipment Ratios (Summary)
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ABB Ltd., Property, Plant and Equipment Ratios
| Ratio |
Description |
The company |
| Average age |
As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient. |
ABB Ltd.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 and from 2010 to 2011.
|
| Estimated total useful life |
Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors. |
ABB Ltd.'s estimated total useful life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011.
|
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
ABB Ltd.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2009 to 2010 and from 2010 to 2011.
|
| Estimated remaining life |
|
ABB Ltd.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011.
|
Average Age
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2011 Calculations
| Ratio |
Description |
The company |
| Average age |
As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient. |
ABB Ltd.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 and from 2010 to 2011.
|
Estimated Total Useful Life
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated total useful life |
Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors. |
ABB Ltd.'s estimated total useful life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011.
|
Estimated Age, Time Elapsed Since Purchase
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
ABB Ltd.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2009 to 2010 and from 2010 to 2011.
|
Estimated Remaining Life
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated remaining life |
|
ABB Ltd.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011.
|
