Property, Plant and Equipment Accounting Policy
Property, plant, and equipment are carried at acquisition cost plus the fair value of related asset retirement costs, if any and if reasonably estimable, and less accumulated depreciation. Interest incurred during the construction of qualifying assets is capitalized and amortized over the related assets' estimated useful lives.
Property, plant, and equipment are depreciated over their expected useful lives, generally using the straight-line method. Land is not depreciated.
| | Useful Lives of Property, Plant, and Equipment |
|---|
| Buildings |
25 to 50 years |
| Leasehold improvements |
Based on the lease contract |
| Information technology equipment |
3 to 5 years |
| Office furniture |
4 to 20 years |
| Automobiles |
4 to 5 years |
Leasehold improvements are depreciated using the straight-line method over the shorter of the term of the lease or the useful life of the asset. If a renewal option exists, the term used reflects the additional time covered by the option if exercise is reasonably assured when the leasehold improvement is first put into operation.
Source: SAP AG, Annual Report
Property, Plant and Equipment Disclosure
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SAP AG, Statement of Financial Position, Property, Plant and Equipment
USD $ in millions, translated from EUR €
Source: Based on data from SAP AG Annual Reports
| Item |
Description |
The company |
| Property, plant, and equipment, historical 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. |
SAP AG's property, plant, and equipment, historical cost declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
| Property, plant, and equipment, carrying value |
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. |
SAP AG's property, plant, and equipment, carrying value declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
Property, Plant and Equipment Ratios (Summary)
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SAP AG, 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. |
SAP AG's average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then slightly improved 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. |
SAP AG's estimated total useful life of depreciable property, plant and equipment increased from 2009 to 2010 but then declined significantly from 2010 to 2011.
|
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
SAP AG's estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level.
|
| Estimated remaining life |
|
SAP AG's estimated remaining life of depreciable property, plant and equipment increased from 2009 to 2010 but then declined significantly from 2010 to 2011.
|
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. |
SAP AG's average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then slightly improved 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. |
SAP AG's estimated total useful life of depreciable property, plant and equipment increased from 2009 to 2010 but then declined significantly from 2010 to 2011.
|
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. |
SAP AG's estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level.
|
Estimated Remaining Life
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated remaining life |
|
SAP AG's estimated remaining life of depreciable property, plant and equipment increased from 2009 to 2010 but then declined significantly from 2010 to 2011.
|
