Microsoft Excel LibreOffice Calc

Intuit Inc. (INTU)

Analysis of Property, Plant and Equipment

High level of difficulty

Property, Plant and Equipment Accounting Policy

Property and equipment is stated at the lower of cost or realizable value, net of accumulated depreciation. Intuit calculates depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to 30 years. Intuit amortizes leasehold improvements using the straight-line method over the lesser of their estimated useful lives or remaining lease terms. Intuit includes the amortization of assets that are recorded under capital leases in depreciation expense. Intuit reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intuit did not record any significant property impairment charges during the twelve months ended July 31, 2019, 2018, or 2017.

Source: 10-K (filing date: 2019-08-30).

Property, Plant and Equipment Disclosure

Intuit Inc., balance sheet: property, plant and equipment

US$ in millions

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Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
Equipment 421  479  579  533  447  402 
Computer software 860  812  749  619  552  509 
Furniture and fixtures 90  88  82  73  71  72 
Leasehold improvements 278  325  310  296  286  282 
Land 79  79  81  60  7  6 
Buildings 368  363  547  403  192  192 
Capital in progress 65  48  71  256  188  130 
Property and equipment, cost 2,161  2,194  2,419  2,240  1,743  1,593 
Accumulated depreciation and amortization (1,381) (1,382) (1,389) (1,209) (1,061) (987)
Property and equipment, net 780  812  1,030  1,031  682  606 

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

Item Description The company
Property and equipment, cost Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Intuit Inc.’s property and equipment, cost declined from 2017 to 2018 and from 2018 to 2019.
Property and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Intuit Inc.’s property and equipment, net declined from 2017 to 2018 and from 2018 to 2019.

Property, Plant and Equipment Ratios (Summary)

Intuit Inc., Property, Plant and Equipment Ratios

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Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
Average age 66.33% 65.34% 59.41% 55.46% 61.12% 62.19%
Estimated total useful life (years) 10 9 11 11 11 11
Estimated age, time elapsed since purchase (years) 7 6 6 6 7 7
Estimated remaining life (years) 4 3 4 5 4 4

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

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. Intuit Inc.’s average age of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.
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. Intuit Inc.’s estimated total useful life of depreciable property, plant and equipment declined from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Intuit Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Estimated remaining life Intuit Inc.’s estimated remaining life of depreciable property, plant and equipment declined from 2017 to 2018 but then slightly increased from 2018 to 2019.

Average Age

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Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
Selected Financial Data (US$ in millions)
Accumulated depreciation and amortization 1,381  1,382  1,389  1,209  1,061  987 
Property and equipment, cost 2,161  2,194  2,419  2,240  1,743  1,593 
Land 79  79  81  60  7  6 
Ratio
Average age1 66.33% 65.34% 59.41% 55.46% 61.12% 62.19%

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

2019 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, cost – Land)
= 100 × 1,381 ÷ (2,161 – 79) = 66.33%

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. Intuit Inc.’s average age of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.

Estimated Total Useful Life

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Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
Selected Financial Data (US$ in millions)
Property and equipment, cost 2,161  2,194  2,419  2,240  1,743  1,593 
Land 79  79  81  60  7  6 
Depreciation expense 199  228  214  195  157  144 
Ratio
Estimated total useful life (years)1 10 9 11 11 11 11

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

2019 Calculations

1 Estimated total useful life (years) = (Property and equipment, cost – Land) ÷ Depreciation expense
= (2,161 – 79) ÷ 199 = 10

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. Intuit Inc.’s estimated total useful life of depreciable property, plant and equipment declined from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Estimated Age, Time Elapsed since Purchase

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Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
Selected Financial Data (US$ in millions)
Accumulated depreciation and amortization 1,381  1,382  1,389  1,209  1,061  987 
Depreciation expense 199  228  214  195  157  144 
Ratio
Time elapsed since purchase (years)1 7 6 6 6 7 7

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

2019 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation expense
= 1,381 ÷ 199 = 7

Ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Intuit Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Estimated Remaining Life

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Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
Selected Financial Data (US$ in millions)
Property and equipment, net 780  812  1,030  1,031  682  606 
Land 79  79  81  60  7  6 
Depreciation expense 199  228  214  195  157  144 
Ratio
Estimated remaining life (years)1 4 3 4 5 4 4

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

2019 Calculations

1 Estimated remaining life (years) = (Property and equipment, net – Land) ÷ Depreciation expense
= (780 – 79) ÷ 199 = 4

Ratio Description The company
Estimated remaining life Intuit Inc.’s estimated remaining life of depreciable property, plant and equipment declined from 2017 to 2018 but then slightly increased from 2018 to 2019.