Property, Plant and Equipment Accounting Policy
Emerson Electric records investments in land, buildings, and machinery and equipment at cost. Depreciation is computed principally using the straight-line method over estimated service lives, which for principal assets are 30 to 40 years for buildings and 8 to 12 years for machinery and equipment. Long-lived tangible assets are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Impairment losses are recognized based on fair value if the sum of expected future undiscounted cash flows of the related assets is less than their carrying values.
Source: Emerson Electric Co., Annual Report
Property, Plant and Equipment Disclosure
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Emerson Electric Co., Statement of Financial Position, Property, Plant and Equipment
Source: Based on data from Emerson Electric Co. Annual Reports
| Item |
Description |
The company |
| Land |
Carrying amount as of the balance sheet date of real estate held for productive use. This excludes land held for sale. |
Emerson Electric Co.'s land declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
| Buildings |
Carrying amount as of the balance sheet date of long-lived, depreciable assets that include building structures held for productive use including any addition, improvement, or renovation to the structure, such as interior masonry, interior flooring, electrical, and plumbing. |
Emerson Electric Co.'s buildings declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
| 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. |
Emerson Electric Co.'s machinery and equipment declined from 2009 to 2010 but then slightly increased 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. |
Emerson Electric Co.'s construction in progress declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 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. |
Emerson Electric Co.'s property, plant and equipment, gross declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
| 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. |
Emerson Electric Co.'s property, plant and equipment, net declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
Property, Plant and Equipment Ratios (Summary)
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Emerson Electric Co., 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. |
Emerson Electric Co.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 but then deteriorated significantly 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. |
Emerson Electric Co.'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. |
Emerson Electric Co.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
|
| Estimated remaining life |
|
Emerson Electric Co.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 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. |
Emerson Electric Co.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 but then deteriorated significantly 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. |
Emerson Electric Co.'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. |
Emerson Electric Co.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
|
Estimated Remaining Life
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated remaining life |
|
Emerson Electric Co.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
