Accounting Policy on Income Taxes
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Accenture calculates and provides for income taxes in each of the tax jurisdictions in which Accenture operates. Deferred tax assets and liabilities, measured using enacted tax rates, are recognized for the future tax consequences of temporary differences between the tax and financial statement bases of assets and liabilities. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. Accenture establishes liabilities or reduces assets when Accenture believes tax positions are not more likely than not of being sustained if challenged. Recognized tax positions are measured at the largest amount of benefit greater than 50 percent likely of being realized. Each fiscal quarter, Accenture evaluates tax positions and adjusts the related tax assets and liabilities in light of changing facts and circumstances.

Source: 10-K (filing date: 2019-10-29).

Accenture PLC, income tax expense (benefit), continuing operations

US$ in thousands

	12 months ended	Aug 31, 2019		Aug 31, 2018		Aug 31, 2017		Aug 31, 2016		Aug 31, 2015		Aug 31, 2014
	U.S. federal
	U.S. state and local
	Non-U.S.
	Current tax expense
	U.S. federal
	U.S. state and local
	Non-U.S.
	Deferred tax expense (benefit)
	Provision for income taxes

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

Item	Description	The company
Current tax expense	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Accenture PLC’s current tax expense increased from 2017 to 2018 and from 2018 to 2019.
Deferred tax expense (benefit)	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Accenture PLC’s deferred tax expense (benefit) increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Accenture PLC’s provision for income taxes increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Accenture PLC, effective income tax rate (EITR) reconciliation

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	U.S. federal statutory income tax rate
	U.S. state and local taxes, net
	Non-U.S. operations taxed at other rates
	Final determinations
	Other net activity in unrecognized tax benefits
	Divestitures
	Excess tax benefits from share based payments
	Other, net
	Effective income tax rate, before changes in tax laws and rates
	Changes in tax laws and rates
	Effective income tax rate

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

Item	Description	The company
Effective income tax rate, before changes in tax laws and rates	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Accenture PLC’s effective income tax rate, before changes in tax laws and rates increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Accenture PLC, components of deferred tax assets and liabilities

US$ in thousands

		Aug 31, 2019		Aug 31, 2018		Aug 31, 2017		Aug 31, 2016		Aug 31, 2015		Aug 31, 2014
	Pensions
	Revenue recognition
	Compensation and benefits
	Share-based compensation
	Tax credit carryforwards
	Net operating loss carryforwards
	Deferred amortization deductions
	Indirect effects of unrecognized tax benefits
	Licenses and other intangibles
	Other
	Deferred tax assets
	Valuation allowance
	Deferred tax assets, net of valuation allowance
	Revenue recognition
	Investments in subsidiaries
	Intangibles
	Other
	Deferred tax liabilities
	Net deferred tax assets (liabilities)

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

Item	Description	The company
Deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Accenture PLC’s deferred tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Deferred tax assets, net of valuation allowance	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Accenture PLC’s deferred tax assets, net of valuation allowance decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Accenture PLC’s net deferred tax assets (liabilities) decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Accenture PLC, deferred tax assets and liabilities, classification

US$ in thousands

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	Current deferred tax assets
	Non-current deferred tax assets
	Current deferred tax liabilities
	Non-current deferred tax liabilities

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

Item	Description	The company
Non-current deferred tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Accenture PLC’s non-current deferred tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Non-current deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Accenture PLC’s non-current deferred tax liabilities decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Accenture PLC, adjustments to financial statements

US$ in thousands

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Total Accenture Plc Shareholders’ Equity
	Total Accenture plc shareholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total Accenture plc shareholders’ equity (adjusted)
	Adjustment to Net Income Attributable To Accenture Plc
	Net income attributable to Accenture plc (as reported)
	Add: Deferred income tax expense (benefit)
	Net income attributable to Accenture plc (adjusted)

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

Accenture PLC, Financial Data: Reported vs. Adjusted

Accenture PLC, adjusted financial ratios

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

Financial ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Accenture PLC’s adjusted current ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Accenture PLC’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Accenture PLC’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Accenture PLC’s adjusted financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Accenture PLC’s adjusted ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Accenture PLC’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Accenture PLC, Financial Ratios: Reported vs. Adjusted

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	As Reported
	Selected Financial Data (US$ in thousands)
	Current assets
	Current liabilities
	Liquidity Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in thousands)
	Adjusted current assets
	Adjusted current liabilities
	Liquidity Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

2019 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= hidden ÷ hidden = hidden

Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Accenture PLC’s adjusted current ratio improved from 2017 to 2018 and from 2018 to 2019.

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	As Reported
	Selected Financial Data (US$ in thousands)
	Net income attributable to Accenture plc
	Revenues
	Profitability Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in thousands)
	Adjusted net income attributable to Accenture plc
	Revenues
	Profitability Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

2019 Calculations

¹ Net profit margin = 100 × Net income attributable to Accenture plc ÷ Revenues
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net income attributable to Accenture plc ÷ Revenues
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Accenture PLC’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	As Reported
	Selected Financial Data (US$ in thousands)
	Revenues
	Total assets
	Activity Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in thousands)
	Revenues
	Adjusted total assets
	Activity Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

2019 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Accenture PLC’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	As Reported
	Selected Financial Data (US$ in thousands)
	Total assets
	Total Accenture plc shareholders’ equity
	Solvency Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in thousands)
	Adjusted total assets
	Adjusted total Accenture plc shareholders’ equity
	Solvency Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

2019 Calculations

¹ Financial leverage = Total assets ÷ Total Accenture plc shareholders’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Accenture plc shareholders’ equity
= hidden ÷ hidden = hidden

Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Accenture PLC’s adjusted financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019.

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	As Reported
	Selected Financial Data (US$ in thousands)
	Net income attributable to Accenture plc
	Total Accenture plc shareholders’ equity
	Profitability Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in thousands)
	Adjusted net income attributable to Accenture plc
	Adjusted total Accenture plc shareholders’ equity
	Profitability Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

2019 Calculations

¹ ROE = 100 × Net income attributable to Accenture plc ÷ Total Accenture plc shareholders’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net income attributable to Accenture plc ÷ Adjusted total Accenture plc shareholders’ equity
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Accenture PLC’s adjusted ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

		Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
	As Reported
	Selected Financial Data (US$ in thousands)
	Net income attributable to Accenture plc
	Total assets
	Profitability Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in thousands)
	Adjusted net income attributable to Accenture plc
	Adjusted total assets
	Profitability Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24).

2019 Calculations

¹ ROA = 100 × Net income attributable to Accenture plc ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net income attributable to Accenture plc ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Accenture PLC’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

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

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

Accenture PLC (ACN)

Analysis of Income Taxes

Accounting Policy on Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Accenture PLC, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Accenture PLC, Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)