Home Depot Inc. (HD) | Property, Plant and Equipment

Property, Plant and Equipment Accounting Policy

Depreciation and Amortization

Home Depot's Buildings, Furniture, Fixtures and Equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold Improvements are amortized using the straight-line method over the original term of the lease or the useful life of the improvement, whichever is shorter. Home Depot's Property and Equipment is depreciated using the following estimated useful lives:

	Life
Buildings	5 – 45 years
Furniture, Fixtures and Equipment	2 – 20 years
Leasehold Improvements	5 – 45 years

Capitalized Software Costs

Home Depot capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method over the estimated useful life of the software, which is three to six years. These costs are included in Furniture, Fixtures and Equipment. Certain development costs not meeting the criteria for capitalization are expensed as incurred.

Source: Home Depot Inc., Annual Report

Property, Plant and Equipment Disclosure

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Home Depot Inc., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

		Feb 3, 2013	Jan 29, 2012	Jan 30, 2011	Jan 31, 2010	Feb 1, 2009	Feb 3, 2008
	Land
	Buildings
	Furniture, fixtures and equipment
	Leasehold improvements
	Construction in progress
	Capital leases
	Property and equipment, at cost
	Accumulated depreciation and amortization
	Net property and equipment

Source: Based on data from Home Depot Inc. 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.	Home Depot Inc.'s land declined from 2011 to 2012 but then slightly increased from 2012 to 2013.
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.	Home Depot Inc.'s buildings increased from 2011 to 2012 and from 2012 to 2013.
Furniture, fixtures and equipment	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.	Home Depot Inc.'s furniture, fixtures and equipment increased from 2011 to 2012 but then declined significantly from 2012 to 2013.
Leasehold improvements	Carrying amount at the balance sheet date of long-lived, depreciable asset that is an addition or improvement to assets held under lease arrangement.	Home Depot Inc.'s leasehold improvements declined from 2011 to 2012 but then increased from 2012 to 2013 exceeding 2011 level.
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.	Home Depot Inc.'s construction in progress increased from 2011 to 2012 but then declined significantly from 2012 to 2013.
Capital leases	The total gross amount of assets subject to a lease meeting the criteria for capitalization.	Home Depot Inc.'s capital leases increased from 2011 to 2012 and from 2012 to 2013.
Property and equipment, at 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.	Home Depot Inc.'s property and equipment, at cost increased from 2011 to 2012 but then slightly declined from 2012 to 2013 not reaching 2011 level.
Net property and equipment	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.	Home Depot Inc.'s net property and equipment declined from 2011 to 2012 and from 2012 to 2013.

Property, Plant and Equipment Ratios (Summary)

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Home Depot Inc., Property, Plant and Equipment Ratios

		Feb 3, 2013	Jan 29, 2012	Jan 30, 2011	Jan 31, 2010	Feb 1, 2009	Feb 3, 2008
	Average age	%	%	%	%	%	%

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.	Home Depot Inc.'s average age of depreciable property, plant and equipment deteriorated from 2011 to 2012 and from 2012 to 2013.

Average Age

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	Feb 3, 2013	Jan 29, 2012	Jan 30, 2011	Jan 31, 2010	Feb 1, 2009	Feb 3, 2008
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization
Property and equipment, at cost
Land
Ratio
Average age¹	%	%	%	%	%	%

2013 Calculations

¹ Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, at cost – Land)
= 100 × ÷ ( – ) = %

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.	Home Depot Inc.'s average age of depreciable property, plant and equipment deteriorated from 2011 to 2012 and from 2012 to 2013.