Property, Plant and Equipment Accounting Policy
Property is recorded at cost. Costs associated with major additions are capitalized and depreciated. Capital assets are expected to yield future benefits and have useful lives which exceed one year. The total cost of a capital asset generally includes all applicable sales taxes, delivery costs, installation costs and other appropriate costs incurred by Lowe's Cos. Inc., including interest in the case of self-constructed assets. Upon disposal, the cost of properties and related accumulated depreciation is removed from the accounts, with gains and losses reflected in SG&A expense in the consolidated statements of earnings.
Property consists of land, buildings and building improvements, equipment and construction in progress. Buildings and building improvements includes owned buildings as well as buildings under capital lease and leasehold improvements. Equipment primarily includes store racking and displays, computer hardware and software, forklifts, vehicles and other store equipment.
Depreciation is provided over the estimated useful lives of the depreciable assets. Assets are depreciated using the straight-line method. Leasehold improvements and assets under capital lease are depreciated over the shorter of their estimated useful lives or the term of the related lease, which may include one or more option renewal periods where failure to exercise such options would result in an economic penalty in such amount that renewal appears, at the inception of the lease, to be reasonably assured. During the term of a lease, if leasehold improvements are placed in service significantly after the inception of the lease, Lowe's Cos. Inc. depreciates these leasehold improvements over the shorter of the useful life of the leasehold assets or a term that includes lease renewal periods deemed to be reasonably assured at the time the leasehold improvements are placed into service. The amortization of these assets is included in depreciation expense in the consolidated financial statements.
Source: Lowe's Cos. Inc., Annual Report
Property, Plant and Equipment Disclosure
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Lowe's Cos. Inc., Statement of Financial Position, Property, Plant and Equipment
Source: Based on data from Lowe's Cos. 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. |
Lowe's Cos. Inc.'s land increased from 2010 to 2011 and from 2011 to 2012.
|
| Buildings and building improvements |
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. |
Lowe's Cos. Inc.'s buildings and building improvements increased from 2010 to 2011 and from 2011 to 2012.
|
| Equipment |
Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. |
Lowe's Cos. Inc.'s equipment increased from 2010 to 2011 and from 2011 to 2012.
|
| 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. |
Lowe's Cos. Inc.'s construction in progress declined from 2010 to 2011 and from 2011 to 2012.
|
| Property, 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. |
Lowe's Cos. Inc.'s property, cost increased from 2010 to 2011 and from 2011 to 2012.
|
| Property, less accumulated depreciation |
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. |
Lowe's Cos. Inc.'s property, less accumulated depreciation declined from 2010 to 2011 and from 2011 to 2012.
|
Property, Plant and Equipment Ratios (Summary)
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Lowe's Cos. 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. |
Lowe's Cos. Inc.'s average age of depreciable property, plant and equipment deteriorated from 2010 to 2011 and from 2011 to 2012.
|
Average Age
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2012 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. |
Lowe's Cos. Inc.'s average age of depreciable property, plant and equipment deteriorated from 2010 to 2011 and from 2011 to 2012.
|
