Property and equipment is stated at cost less accumulated depreciation, and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of Microsoft’s property and equipment are generally as follows: computer software developed or acquired for internal use, three to seven years; computer equipment, two to three years; buildings and improvements, five to 15 years; leasehold improvements, three to 20 years; and furniture and equipment, one to 10 years. Land is not depreciated.

Source: 10-K (filing date: 2018-08-03).

Microsoft Corp., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

		Jun 30, 2018		Jun 30, 2017		Jun 30, 2016		Jun 30, 2015		Jun 30, 2014		Jun 30, 2013
	Land
	Buildings and improvements
	Leasehold improvements
	Computer equipment and software
	Furniture and equipment
	Property and equipment, at cost
	Accumulated depreciation
	Property and equipment, net

Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).

Item	Description	The company
Property and equipment, at 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.	Microsoft Corp.’s property and equipment, at cost increased from 2016 to 2017 and from 2017 to 2018.
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.	Microsoft Corp.’s property and equipment, net increased from 2016 to 2017 and from 2017 to 2018.

Microsoft Corp., Property, Plant and Equipment Ratios

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Average age
	Estimated total useful life (years)
	Estimated age, time elapsed since purchase (years)
	Estimated remaining life (years)

Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).

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.	Microsoft Corp.’s average age of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.
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.	Microsoft Corp.’s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Estimated time elapsed since purchase	The approximate age in years of a company’s fixed assets. Useful for comparison purposes.	Microsoft Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.
Estimated remaining life		Microsoft Corp.’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Accumulated depreciation
	Property and equipment, at cost
	Land
	Ratio
	Average age¹

Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).

2018 Calculations

¹ Average age = 100 × Accumulated depreciation ÷ (Property and equipment, at cost – Land)
= 100 × 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.	Microsoft Corp.’s average age of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Property and equipment, at cost
	Land
	Depreciation expense
	Ratio
	Estimated total useful life (years)¹

Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).

2018 Calculations

¹ Estimated total useful life (years) = (Property and equipment, at cost – Land) ÷ Depreciation expense
= ( hidden – hidden ) ÷ 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.	Microsoft Corp.’s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Accumulated depreciation
	Depreciation expense
	Ratio
	Time elapsed since purchase (years)¹

Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).

2018 Calculations

¹ Time elapsed since purchase (years) = Accumulated depreciation ÷ Depreciation expense
= 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.	Microsoft Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Property and equipment, net
	Land
	Depreciation expense
	Ratio
	Estimated remaining life (years)¹

Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).

2018 Calculations

¹ Estimated remaining life (years) = (Property and equipment, net – Land) ÷ Depreciation expense
= ( hidden – hidden ) ÷ hidden = hidden

Ratio	Description	The company
Estimated remaining life		Microsoft Corp.’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

	Microsoft Corp.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

Microsoft Corp. (MSFT)

Analysis of Property, Plant and Equipment

Property, Plant and Equipment Accounting Policy

Property, Plant and Equipment Disclosure

Property, Plant and Equipment Ratios (Summary)

Average Age

Estimated Total Useful Life

Estimated Age, Time Elapsed since Purchase

Estimated Remaining Life