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eBay Inc. (EBAY)
Analysis of Property, Plant and Equipment
Difficulty: Advanced
Property, Plant and Equipment Accounting Policy
Property and equipment are stated at historical cost less accumulated depreciation. Depreciation for equipment, buildings and leasehold improvements commences once they are ready for eBay’s intended use. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally, one to three years for computer equipment and software, up to thirty years for buildings and building improvements, the shorter of five years or the term of the lease for leasehold improvements and three years for furniture, fixtures and vehicles. Land is not depreciated.
Source: 10-K (filing date: 2019-01-30).
Property, Plant and Equipment Disclosure
eBay Inc., balance sheet: property, plant and equipment
US$ in millions
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |||||||
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| Computer equipment and software | |
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| Land and buildings, including building improvements | |
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| Leasehold improvements | |
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| Furniture and fixtures | |
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| Construction in progress and other | |
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| Property and equipment, gross | |
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| Accumulated depreciation | |
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| Property and equipment, net | |
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Based on: 10-K (filing date: 2019-01-30), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06).
| Item | Description | The company |
|---|---|---|
| Property and equipment, gross | 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. | eBay Inc.’s property and equipment, gross 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. |
Property, Plant and Equipment Ratios (Summary)
eBay Inc., Property, Plant and Equipment Ratios
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
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| Average age | |
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| Estimated total useful life (years) | |
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| Estimated age, time elapsed since purchase (years) | |
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| Estimated remaining life (years) | |
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Based on: 10-K (filing date: 2019-01-30), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06).
| 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. | eBay Inc.’s average age of depreciable property, plant and equipment deteriorated 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. | eBay Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 and from 2017 to 2018. |
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | eBay Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Estimated remaining life | eBay Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level. |
Average Age
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
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| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | |
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| Property and equipment, gross | |
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| Ratio | ||||||
| Average age1 | |
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Based on: 10-K (filing date: 2019-01-30), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06).
2018 Calculations
1 Average age = 100 × Accumulated depreciation ÷ Property and equipment, gross
= 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. | eBay Inc.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018. |
Estimated Total Useful Life
Based on: 10-K (filing date: 2019-01-30), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06).
2018 Calculations
1 Estimated total useful life (years) = Property and equipment, gross ÷ Depreciation 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. | eBay Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 and from 2017 to 2018. |
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (filing date: 2019-01-30), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06).
2018 Calculations
1 Time elapsed since purchase (years) = Accumulated depreciation ÷ Depreciation 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. | eBay Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018. |
Estimated Remaining Life
Based on: 10-K (filing date: 2019-01-30), 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06).
2018 Calculations
1 Estimated remaining life (years) = Property and equipment, net ÷ Depreciation expense on property and equipment
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Estimated remaining life | eBay Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level. |