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Microsoft Excel LibreOffice Calc


Analysis of Property, Plant and Equipment

Difficulty: Advanced


Property, Plant and Equipment Accounting Policy

Property, plant and equipment is recorded at historical cost, net of accumulated depreciation, amortization and, if applicable, impairment charges. Amgen reviews the property, plant and equipment assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation is provided over the assets' useful lives on a straight-line basis. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms.

Source: Amgen Inc., Annual Report


Property, Plant and Equipment Disclosure

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

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Land hidden hidden hidden hidden hidden
Buildings and improvements hidden hidden hidden hidden hidden
Manufacturing equipment hidden hidden hidden hidden hidden
Laboratory equipment hidden hidden hidden hidden hidden
Other hidden hidden hidden hidden hidden
Construction in progress hidden hidden hidden hidden hidden
Property, plant and equipment, gross hidden hidden hidden hidden hidden
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Property, plant and equipment, net hidden hidden hidden hidden hidden

Source: Based on data from Amgen 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. Amgen Inc.'s land declined from 2015 to 2016 and from 2016 to 2017.
Buildings and 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. Amgen Inc.'s buildings and improvements increased from 2015 to 2016 but then declined significantly from 2016 to 2017.
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. Amgen Inc.'s construction in progress declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 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. Amgen Inc.'s property, plant and equipment, gross increased from 2015 to 2016 and from 2016 to 2017.
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. Amgen Inc.'s property, plant and equipment, net increased from 2015 to 2016 and from 2016 to 2017.

Property, Plant and Equipment Ratios (Summary)

Amgen Inc., Property, Plant and Equipment Ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Average age hidden% hidden% hidden% hidden% hidden%
Estimated total useful life (years) hidden hidden hidden hidden hidden
Estimated age, time elapsed since purchase (years) hidden hidden hidden hidden hidden
Estimated remaining life (years) hidden hidden hidden hidden hidden
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. Amgen Inc.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 and from 2016 to 2017.
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. Amgen Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2015 to 2016 and from 2016 to 2017.
Estimated time elapsed since purchase The approximate age in years of a company's fixed assets. Useful for comparison purposes. Amgen Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2015 to 2016 and from 2016 to 2017.
Estimated remaining life Amgen Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2015 to 2016 and from 2016 to 2017.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Property, plant and equipment, gross hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Ratio
Average age1 hidden% hidden% hidden% hidden% hidden%

2017 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property, plant and equipment, gross – Land)
= 100 × hidden ÷ (hiddenhidden) = hidden%

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. Amgen Inc.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 and from 2016 to 2017.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Property, plant and equipment, gross hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Depreciation and amortization expense associated with property, plant and equipment hidden hidden hidden hidden hidden
Ratio
Estimated total useful life (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Estimated total useful life (years) = (Property, plant and equipment, gross – Land) ÷ Depreciation and amortization expense associated with property, plant and equipment
= (hiddenhidden) ÷ hidden = hidden

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. Amgen Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2015 to 2016 and from 2016 to 2017.

Estimated Age, Time Elapsed Since Purchase

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Depreciation and amortization expense associated with property, plant and equipment hidden hidden hidden hidden hidden
Ratio
Time elapsed since purchase (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense associated with property, plant and equipment
= hidden ÷ hidden = hidden

Ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company's fixed assets. Useful for comparison purposes. Amgen Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2015 to 2016 and from 2016 to 2017.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Property, plant and equipment, net hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Depreciation and amortization expense associated with property, plant and equipment hidden hidden hidden hidden hidden
Ratio
Estimated remaining life (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Estimated remaining life (years) = (Property, plant and equipment, net – Land) ÷ Depreciation and amortization expense associated with property, plant and equipment
= (hiddenhidden) ÷ hidden = hidden

Ratio Description The company
Estimated remaining life Amgen Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2015 to 2016 and from 2016 to 2017.