Accenture PLC (NYSE:ACN)

The analysis of the property, plant, and equipment data over the six-year period reveals several notable trends and shifts in the composition and net value of the company's tangible fixed assets.

Buildings and Land

This category shows a steady and minimal value from 2019 to 2021, with amounts ranging from 56 to 61 thousand US dollars, followed by a significant jump to 5,609 thousand US dollars in 2022. No values are reported for 2023 and 2024, which may indicate reclassification, disposal, or an accounting change affecting this asset group.

Computers, Related Equipment, and Software

There is a consistent increase in this category from 2019 through 2022, rising from approximately 1,723,623 to 2,154,989 thousand US dollars, reflecting ongoing investment. However, a slight decline appears in 2023 to 2,112,846 thousand US dollars, followed by a rebound to 2,163,222 thousand US dollars in 2024. The overall trend suggests a level of renewal and replacement rather than a steady accumulation of assets.

Furniture and Fixtures

The value of furniture and fixtures shows growth from 394,671 thousand US dollars in 2019 to a peak of 470,624 thousand US dollars in 2021. Subsequently, a gradual decline is observed, with values decreasing to 431,516 thousand US dollars by 2024. This pattern may indicate reduced spending or disposal of older assets.

Leasehold Improvements

This asset category demonstrates a steady increase throughout the period, from 1,228,845 thousand US dollars in 2019 to 1,640,236 thousand US dollars in 2024. The continuous upward trend indicates ongoing investments in leased properties or upgrades, suggesting an emphasis on improving leased facilities.

Property and Equipment, Gross

The gross value of property and equipment rises consistently from 3,347,195 thousand US dollars in 2019 to 4,234,974 thousand US dollars in 2024, despite a minor dip in 2023. This overall increase signals sustained capital expenditure in fixed assets.

Accumulated Depreciation

Accumulated depreciation steadily increases (in absolute terms) from -1,956,029 thousand US dollars in 2019 to -2,713,855 thousand US dollars in 2024. This progression reflects ongoing asset usage and aging, as well as the systematic expensing of asset costs over their useful lives.

Property and Equipment, Net

The net property and equipment value rises from 1,391,166 thousand US dollars in 2019, reaching a peak of 1,659,140 thousand US dollars in 2022, followed by a decline over the two subsequent years to 1,521,119 thousand US dollars in 2024. This decreasing trend after 2022 implies either asset disposals, increased depreciation expense exceeding capital expenditures, or impairment charges affecting net book value.

In summary, the company shows a strategic pattern of investment primarily in computers, related equipment, software, and leasehold improvements, with moderate reinvestment and some disposal or reduction in furniture and fixtures assets. The abrupt spike in buildings and land value in 2022, followed by missing data, warrants further investigation. Net asset values peaked in 2022 but declined thereafter, suggesting a potential shift in asset management strategy or market conditions affecting asset valuation.

Average Age Ratio

The average age ratio shows a steadily increasing trend over the six-year period, rising from 58.44% in 2019 to 64.08% in 2024. This indicates that the property, plant, and equipment are progressively aging, with a higher proportion of their estimated useful life consumed each year.

Estimated Total Useful Life

The estimated total useful life remained constant at 8 years from 2019 to 2021, decreased to 7 years for 2022 and 2023, and then reverted back to 8 years in 2024. This fluctuation suggests periodic reassessments of asset longevity, possibly due to changes in technological relevance or maintenance practices.

Estimated Age (Time Elapsed Since Purchase)

The estimated age progressed fairly consistently, increasing from 4 years in 2019 to 5 years in 2020 and 2021, dropping back to 4 years in 2022 and 2023, and returning to 5 years in 2024. This pattern may reflect asset additions or disposals impacting the average age calculation.

Estimated Remaining Life

The estimated remaining life generally remained stable at 3 years for most periods except in 2023, when it decreased to 2 years, before returning to 3 years in 2024. This temporary reduction aligns with the period where the estimated total useful life was shortened and may indicate a period where the assets were expected to have shorter usability.

The analysis of the annual property, plant, and equipment (PP&E) data reveals several notable trends over the six-year period.

Accumulated Depreciation

Accumulated depreciation has consistently increased each year, rising from 1,956,029 thousand US dollars in 2019 to 2,713,855 thousand US dollars in 2024. This upward trend reflects ongoing depreciation expense recognition, which is a typical pattern as the assets age and usage accumulates.

Property and Equipment, Gross

The gross value of property and equipment generally increased from 3,347,195 thousand US dollars in 2019 to 4,234,974 thousand US dollars in 2024. There was a steady growth from 2019 to 2022, followed by a slight decline in 2023, and then a recovery in 2024. This suggests periodic additions and disposals or revaluations of assets, with a net positive investment in property and equipment over the period.

Average Age Ratio

The average age ratio, representing the proportion of accumulated depreciation relative to gross PP&E, increased from 58.44% in 2019 to 64.08% in 2024. The gradual rise indicates an aging asset base, meaning the company's fixed assets are becoming older on average. This trend could potentially increase maintenance costs or signal upcoming capital expenditures to replace aging equipment.

Overall, the data indicates continuous investment in property and equipment alongside consistent asset usage and aging. The increase in accumulated depreciation and average age ratio suggests the company’s asset base is maturing, which may require strategic consideration regarding asset renewal or replacement in the near future.

Property and Equipment, Gross

The gross value of property and equipment demonstrated a generally increasing trend over the six-year period. It rose from approximately 3.35 billion US dollars in 2019 to about 4.23 billion US dollars in 2024. Notably, there were consistent year-on-year increases except for a slight decline between 2022 and 2023, where the value decreased marginally from around 4.15 billion to approximately 4.10 billion US dollars. The recovery in 2024 further suggested continued investment or capital additions in property and equipment.

Depreciation Expense

The depreciation expense showed a rising pattern from 2019 through 2023, increasing from roughly 441 million US dollars to a peak of about 621 million US dollars. However, in 2024, the depreciation expense decreased significantly to approximately 548 million US dollars. This reduction could indicate changes in depreciation policies, asset disposals, or a shift in the estimated useful life of assets. The general increase over previous years aligns with the growth in the gross property and equipment balance, reflecting greater asset bases subject to depreciation.

Estimated Total Useful Life

The estimated total useful life of property and equipment remained steady at 8 years from 2019 to 2021. It then decreased to 7 years for 2022 and 2023 before returning to 8 years in 2024. This fluctuation suggests adjustments in asset lifespan assumptions that might have influenced the reported depreciation expense, especially the lower expense observed in 2024 despite the increased asset base.

Overall Insights

The data indicate consistent capital investment in property and equipment from 2019 to 2024, with a temporary dip in 2023. The depreciation expense trend mostly correlates with the asset growth and changes in estimated useful life, highlighting a responsive adjustment in asset management and accounting policies. The temporary shortening of the asset useful life could have accelerated depreciation expense in 2022 and 2023 while the reversion in 2024 may have contributed to the decline in depreciation expense despite asset growth.

Accumulated Depreciation

The accumulated depreciation shows a consistently increasing trend from 1,956,029 thousand US dollars in August 2019 to 2,713,855 thousand US dollars in August 2024. This steady rise indicates ongoing depreciation on the property, plant, and equipment assets over the years without any indication of asset disposals or impairments affecting the accumulated balance significantly.

Depreciation Expense

The depreciation expense increased from 440,796 thousand US dollars in August 2019 to a peak of 620,659 thousand US dollars in August 2023. However, in the latest period ending August 2024, the depreciation expense decreased to 547,935 thousand US dollars. This decline following the previous upward trajectory may suggest a change in the asset base, such as disposals or a change in the depreciation method or estimates applied.

Time Elapsed Since Purchase

The time elapsed since purchase fluctuates between 4 and 5 years across the periods, indicating a relatively stable average age of the asset base. This stability suggests periodic replacement or addition of assets that maintains a consistent average asset lifecycle duration.

Overall Analysis

Overall, the data reflects a growing base of depreciable assets, supported by increasing accumulated depreciation and generally rising depreciation expenses through most periods. The slight decline in depreciation expense in the last period may signal adjustments in asset management or accounting policies. The stable time elapsed since purchase implies a steady renewal or maintenance cycle for property, plant, and equipment.

Property and Equipment, Net

The net value of property and equipment showed a steady increase from 1,391,166 thousand US dollars in 2019 to a peak of 1,659,140 thousand US dollars in 2022. However, there was a noticeable decline in 2023, dropping to 1,530,007 thousand US dollars, and a slight further decrease in 2024 to 1,521,119 thousand US dollars. This pattern suggests initial growth and investment in property and equipment up to 2022, followed by a period of reduction or asset disposals in the subsequent two years.

Depreciation Expense

Depreciation expense rose consistently from 440,796 thousand US dollars in 2019 to a high of 620,659 thousand US dollars in 2023, indicating increasing charges against income, potentially due to higher asset values or accelerated depreciation methods. In 2024, depreciation expense decreased to 547,935 thousand US dollars, which may reflect the reduced asset base or changes in depreciation policy or asset lifespan assumptions.

Estimated Remaining Life

The estimated remaining useful life of the assets remained stable at 3 years from 2019 to 2022. In 2023, this estimate dropped to 2 years, possibly indicating an accelerated approach in asset utilization or faster obsolescence. The remaining life estimate returned to 3 years in 2024, which could signify adjustments in asset valuations or reassessments of asset longevity.