Property, Plant and Equipment Accounting Policy
Property, plant and equipment are stated at historical cost and depreciated by the straight-line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from 3 to 20 years and buildings and building improvements over periods up to 40 years.
Kraft Foods reviews long-lived assets, including amortizable intangible assets, for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. Kraft Foods performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for impairment of assets held for use, Kraft Foods groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If an impairment is determined to exist, the loss is calculated based on estimated fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.
Source: Kraft Foods Inc., Annual Report
Property, Plant and Equipment Disclosure
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Kraft Foods Inc., Statement of Financial Position, Property, Plant and Equipment
Source: Based on data from Kraft Foods Inc. Annual Reports
| Item |
Description |
The company |
| Land and land improvements |
Real estate assets held for productive use and depreciable assets that are an addition or improvement to real estate held for productive use. |
Kraft Foods Inc.'s land and land improvements increased from 2008 to 2009 and from 2009 to 2010.
|
| Buildings and building equipment |
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. |
Kraft Foods Inc.'s buildings and building equipment increased from 2008 to 2009 and from 2009 to 2010.
|
| 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. |
Kraft Foods Inc.'s machinery and equipment increased from 2008 to 2009 and from 2009 to 2010.
|
| 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. |
Kraft Foods Inc.'s construction in progress declined from 2008 to 2009 but then increased from 2009 to 2010 exceeding 2008 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. |
Kraft Foods Inc.'s property, plant and equipment, gross increased from 2008 to 2009 and from 2009 to 2010.
|
| 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. |
Kraft Foods Inc.'s property, plant and equipment, net increased from 2008 to 2009 and from 2009 to 2010.
|
Property, Plant and Equipment Ratios (Summary)
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Kraft Foods Inc., 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. |
Kraft Foods Inc.'s average age of depreciable property, plant and equipment deteriorated from 2008 to 2009 but then improved from 2009 to 2010 exceeding 2008 level.
|
| 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. |
Kraft Foods Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2008 to 2009 but then declined significantly from 2009 to 2010.
|
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
Kraft Foods Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2008 to 2009 but then improved from 2009 to 2010 exceeding 2008 level.
|
| Estimated remaining life |
|
Kraft Foods Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2008 to 2009 but then slightly declined from 2009 to 2010.
|
Average Age
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2010 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. |
Kraft Foods Inc.'s average age of depreciable property, plant and equipment deteriorated from 2008 to 2009 but then improved from 2009 to 2010 exceeding 2008 level.
|
Estimated Total Useful Life
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2010 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. |
Kraft Foods Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2008 to 2009 but then declined significantly from 2009 to 2010.
|
Estimated Age, Time Elapsed Since Purchase
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2010 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. |
Kraft Foods Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2008 to 2009 but then improved from 2009 to 2010 exceeding 2008 level.
|
Estimated Remaining Life
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2010 Calculations
| Ratio |
Description |
The company |
| Estimated remaining life |
|
Kraft Foods Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2008 to 2009 but then slightly declined from 2009 to 2010.
|
