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Analysis of Property, Plant and Equipment
Advanced level
Accounting Policy on Property, Plant and Equipment
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation of property and equipment is computed on a straight-line basis over the following estimated useful lives:
| Computers, related equipment and software | 2 to 7 years |
| Furniture and fixtures | 5 to 10 years |
| Leasehold improvements | Lesser of lease term or 15 years |
Source: 10-K (filing date: 2019-10-29).
Property, Plant and Equipment Disclosure
Accenture PLC, balance sheet: property, plant and equipment
US$ in thousands
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 |
|---|---|---|
| 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. | Accenture PLC’s property and equipment, gross increased 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. | Accenture PLC’s property and equipment, net increased from 2017 to 2018 and from 2018 to 2019. |
Asset Age Ratios (Summary)
Accenture PLC, asset age ratios
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).
| Asset age ratio | Description | The company |
|---|---|---|
| Average age ratio | 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. | Accenture PLC’s average age ratio of depreciable property, plant and equipment improved 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. | Accenture PLC’s estimated total useful life of depreciable property, plant and equipment decreased from 2017 to 2018 but then slightly increased from 2018 to 2019. |
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Accenture PLC’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019. |
| Estimated remaining life | Accenture PLC’s estimated remaining life of depreciable property, plant and equipment decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level. |
Average Age
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 Average age = 100 × Accumulated depreciation ÷ Property and equipment, gross
= 100 × ÷ =
| Asset age 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. | Accenture PLC’s average age ratio of depreciable property, plant and equipment improved from 2017 to 2018 and from 2018 to 2019. |
Estimated Total Useful Life
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 Estimated total useful life = Property and equipment, gross ÷ Depreciation expense
= ÷ =
| Asset age 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. | Accenture PLC’s estimated total useful life of depreciable property, plant and equipment decreased from 2017 to 2018 but then slightly increased from 2018 to 2019. |
Estimated Age, Time Elapsed since Purchase
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 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
| Asset age ratio | Description | The company |
|---|---|---|
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Accenture PLC’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019. |
Estimated Remaining Life
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 Estimated remaining life = Property and equipment, net ÷ Depreciation expense
= ÷ =
| Asset age ratio | Description | The company |
|---|---|---|
| Estimated remaining life | Accenture PLC’s estimated remaining life of depreciable property, plant and equipment decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level. |