Pfizer Inc. (PFE) | Analysis of Property, Plant and Equipment

Property, Plant and Equipment Accounting Policy

Property, plant and equipment, less accumulated depreciation are recorded at original cost and are increased by the cost of any significant improvements after purchase. Property, plant and equipment assets, other than land and construction in progress, are depreciated evenly over the estimated useful life of the individual assets. Depreciation begins when the asset is ready for its intended use. For tax purposes, accelerated depreciation methods are used as allowed by tax laws.

Source: Pfizer Inc., Annual Report

Property, Plant and Equipment Disclosure

Pfizer Inc., Statement of Financial Position, Property, Plant and Equipment

Source: Based on data from Pfizer 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.	Pfizer Inc.'s land declined from 2009 to 2010 and from 2010 to 2011.
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.	Pfizer Inc.'s buildings declined from 2009 to 2010 and from 2010 to 2011.
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.	Pfizer Inc.'s machinery and equipment increased from 2009 to 2010 but then declined significantly from 2010 to 2011.
Furniture, fixtures and other	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.	Pfizer Inc.'s furniture, fixtures and other increased from 2009 to 2010 but then declined significantly from 2010 to 2011.
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.	Pfizer Inc.'s construction in progress declined from 2009 to 2010 but then slightly increased from 2010 to 2011.
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.	Pfizer Inc.'s property, plant and equipment, gross declined from 2009 to 2010 and from 2010 to 2011.
Property, plant and equipment, 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.	Pfizer Inc.'s property, plant and equipment, less accumulated depreciation declined from 2009 to 2010 and from 2010 to 2011.

Property, Plant and Equipment Ratios (Summary)

Pfizer 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.	Pfizer Inc.'s average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.

Average Age

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.	Pfizer Inc.'s average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.