Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives: buildings–up to 40 years; leasehold improvements–the lesser of useful lives of assets or lease terms, which generally include option periods; and equipment–three to 12 years.
Source: McDonald's Corp., Annual Report
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McDonald's Corp., Statement of Financial Position, Property, Plant and Equipment
USD $ in thousands
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
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Land | |
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Buildings and improvements on owned land | |
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Buildings and improvements on leased land | |
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Equipment, signs and seating | |
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Other | |
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Property and equipment, at cost | |
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Accumulated depreciation and amortization | |
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Net property and equipment | |
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Source: Based on data from McDonald's Corp. 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. | McDonald's Corp.'s land increased from 2009 to 2010 and from 2010 to 2011. |
| Equipment, signs and seating | Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. | McDonald's Corp.'s equipment, signs and seating increased from 2009 to 2010 and from 2010 to 2011. |
| 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. | McDonald's Corp.'s property and equipment, at cost increased from 2009 to 2010 and from 2010 to 2011. |
| 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. | McDonald's Corp.'s net property and equipment increased from 2009 to 2010 and from 2010 to 2011. |
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McDonald's Corp., Property, Plant and Equipment Ratios
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
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Average age | % |
% |
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% |
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Estimated total useful life (years) | |
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Estimated age, time elapsed since purchase (years) | |
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Estimated remaining life (years) | |
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| 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. | McDonald's Corp.'s average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 and 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. | McDonald's Corp.'s estimated total useful life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011. |
| Estimated time elapsed since purchase | The approximate age in years of a company's fixed assets. Useful for comparison purposes. | McDonald's Corp.'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 | McDonald's Corp.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | ||||||
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Accumulated depreciation and amortization | |
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Property and equipment, at cost | |
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Land | |
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| Ratio | ||||||
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Average age1 | % |
% |
% |
% |
% |
2011 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. | McDonald's Corp.'s average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | ||||||
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Property and equipment, at cost | |
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Land | |
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Depreciation and amortization expense | |
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| Ratio | ||||||
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Estimated total useful life (years)1 | |
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2011 Calculations
1 Estimated total useful life (years) = (Property and equipment, at cost – Land) ÷ Depreciation and amortization expense
= ( – ) ÷ =
| 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. | McDonald's Corp.'s estimated total useful life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | ||||||
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Accumulated depreciation and amortization | |
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Depreciation and amortization expense | |
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| Ratio | ||||||
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Time elapsed since purchase (years)1 | |
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2011 Calculations
1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated time elapsed since purchase | The approximate age in years of a company's fixed assets. Useful for comparison purposes. | McDonald's Corp.'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. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | ||||||
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Net property and equipment | |
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Land | |
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Depreciation and amortization expense | |
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| Ratio | ||||||
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Estimated remaining life (years)1 | |
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2011 Calculations
1 Estimated remaining life (years) = (Net property and equipment – Land) ÷ Depreciation and amortization expense
= ( – ) ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated remaining life | McDonald's Corp.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011. |
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