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Property, Plant and Equipment Accounting Policy

Property, plant and equipment are stated at cost. Depreciation is computed by use of the straight-line method over the estimated useful lives of the assets, which for buildings is the lesser of 30 years or the remaining life of the underlying building; between one and five years for machinery and equipment, including product tooling and manufacturing process equipment; and the shorter of lease term or useful life for leasehold improvements. Apple capitalizes eligible costs to acquire or develop internal-use software that are incurred subsequent to the preliminary project stage. Capitalized costs related to internal-use software are amortized using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Depreciation and amortization expense on property and equipment was $8.2 billion, $8.3 billion and $9.2 billion during 2017, 2016 and 2015, respectively.

Source: Apple Inc., Annual Report

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Property, Plant and Equipment Disclosure

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

USD $ in millions

 

Source: Based on data from Apple Inc. Annual Reports

Item Description The company
Machinery, equipment and internal-use software Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. Apple Inc.'s machinery, equipment and internal-use software increased from 2015 to 2016 and from 2016 to 2017.
Leasehold improvements Carrying amount at the balance sheet date of long-lived, depreciable asset that is an addition or improvement to assets held under lease arrangement. Apple Inc.'s leasehold improvements increased from 2015 to 2016 and from 2016 to 2017.
Gross property, plant and equipment 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. Apple Inc.'s gross property, plant and equipment 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. Apple Inc.'s property, plant and equipment, net increased from 2015 to 2016 and from 2016 to 2017.

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Property, Plant and Equipment Ratios (Summary)

Apple Inc., Property, Plant and Equipment Ratios

 
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Average age % % % % % %
Estimated total useful life (years)
Estimated age, time elapsed since purchase (years)
Estimated remaining life (years)
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. Apple Inc.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.
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. Apple 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. Apple 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 Apple Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2015 to 2016 and from 2016 to 2017.

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Average Age

 
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization
Gross property, plant and equipment
Ratio
Average age1 % % % % % %

2017 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ Gross property, plant and equipment
= 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. Apple Inc.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.

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Estimated Total Useful Life

 
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Selected Financial Data (USD $ in millions)
Gross property, plant and equipment
Depreciation and amortization expense on property and equipment
Ratio
Estimated total useful life (years)1

2017 Calculations

1 Estimated total useful life (years) = Gross property, plant and equipment ÷ Depreciation and amortization expense on property and equipment
= ÷ =

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

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Estimated Age, Time Elapsed Since Purchase

 
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization
Depreciation and amortization expense on property and equipment
Ratio
Time elapsed since purchase (years)1

2017 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense on property and equipment
= ÷ =

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

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Estimated Remaining Life

 
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Selected Financial Data (USD $ in millions)
Property, plant and equipment, net
Depreciation and amortization expense on property and equipment
Ratio
Estimated remaining life (years)1

2017 Calculations

1 Estimated remaining life (years) = Property, plant and equipment, net ÷ Depreciation and amortization expense on property and equipment
= ÷ =

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

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