Property, Plant and Equipment Accounting Policy
Land and buildings are stated at cost less depreciation. Freehold land is not depreciated. Leaseholds are depreciated over the unexpired period of the lease. Other property, plant and equipment are depreciated on a straight-line basis to estimated residual values over their expected useful lives, and these values and lives are reviewed each year. Subject to these reviews, the estimated useful lives fall within the following ranges: industrial and other buildings – 10 to 50 years; plant and machinery – 5 to 25 years; fixtures and fittings – 5 to 10 years; casks and containers – 15 to 50 years; and returnable bottles and crates – 5 to 10 years.
Reviews are carried out if there is some indication that impairment may have occurred, to ensure that property, plant and equipment are not carried at above their recoverable amounts.
Source: Diageo PLC, Annual Report
Property, Plant and Equipment Disclosure
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Diageo PLC, Statement of Financial Position, Property, Plant and Equipment
USD $ in millions, translated from GBP £
Source: Based on data from Diageo PLC Annual Reports
| Item |
Description |
The company |
| Plant and equipment |
Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. |
Diageo PLC's plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
| Fixtures and fittings |
Carrying amount at the balance sheet date for long-lived, depreciable asset commonly used in offices and stores. Examples include desks, chairs, and store fixtures. |
Diageo PLC's fixtures and fittings declined from 2009 to 2010 and from 2010 to 2011.
|
| Under construction |
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. |
Diageo PLC's under construction increased from 2009 to 2010 and from 2010 to 2011.
|
| Property, plant and equipment, cost |
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. |
Diageo PLC's property, plant and equipment, cost increased from 2009 to 2010 and from 2010 to 2011.
|
| Property, plant and equipment, carrying amount |
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. |
Diageo PLC's property, plant and equipment, carrying amount increased from 2009 to 2010 and from 2010 to 2011.
|
Property, Plant and Equipment Ratios (Summary)
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Diageo PLC, 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. |
Diageo PLC's average age of depreciable property, plant and equipment deteriorated 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. |
Diageo PLC's estimated total useful life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
Diageo PLC's estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.
|
| Estimated remaining life |
|
Diageo PLC's estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
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. |
Diageo PLC's average age of depreciable property, plant and equipment deteriorated 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. |
Diageo PLC's estimated total useful life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
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. |
Diageo PLC's estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated 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 |
|
Diageo PLC's estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
