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Microsoft Excel LibreOffice Calc


Analysis of Property, Plant and Equipment

Difficulty: Advanced


Property, Plant and Equipment Accounting Policy

DEPRECIATION AND AMORTIZATION

The cost of GE manufacturing plant and equipment is generally depreciated on a straight-line basis over its estimated economic life.

The cost of GE Capital equipment leased to others on operating leases is depreciated on a straight-line basis to estimated residual value over the lease term or over the estimated economic life of the equipment.

Source: General Electric Co., Annual Report


Property, Plant and Equipment Disclosure

General Electric Co., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Land and improvements hidden hidden hidden hidden hidden
Buildings, structures and related equipment hidden hidden hidden hidden hidden
Machinery and equipment hidden hidden hidden hidden hidden
Leasehold costs and manufacturing plant under construction hidden hidden hidden hidden hidden
GE hidden hidden hidden hidden hidden
Land and improvements, buildings, structures and related equipment hidden hidden hidden hidden hidden
Aircraft hidden hidden hidden hidden hidden
Vehicles hidden hidden hidden hidden hidden
Railroad rolling stock hidden hidden hidden hidden hidden
Construction and manufacturing hidden hidden hidden hidden hidden
All other hidden hidden hidden hidden hidden
Equipment leased to others hidden hidden hidden hidden hidden
GE Capital hidden hidden hidden hidden hidden
Eliminations hidden hidden hidden hidden hidden
Property, plant and equipment, original cost hidden hidden hidden hidden hidden
Accumulated depreciation hidden hidden hidden hidden hidden
Property, plant and equipment, net carrying value hidden hidden hidden hidden hidden

Source: Based on data from General Electric Co. Annual Reports

Item Description The company
Land and improvements Real estate assets held for productive use and depreciable assets that are an addition or improvement to real estate held for productive use. General Electric Co.'s land and improvements increased from 2015 to 2016 and from 2016 to 2017.
Buildings, structures and related equipment Carrying amount as of the balance sheet date of long-lived, depreciable assets that include building structures held for productive use including any addition, improvement, or renovation to the structure, such as interior masonry, interior flooring, electrical, and plumbing. General Electric Co.'s buildings, structures and related equipment declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Machinery and equipment Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. General Electric Co.'s machinery and equipment increased from 2015 to 2016 and from 2016 to 2017.
Leasehold costs and manufacturing plant under construction Carrying amount at the balance sheet date of long-lived asset under construction that include construction costs to date on capital projects that have not been completed and assets being constructed that are not ready to be placed into service. General Electric Co.'s leasehold costs and manufacturing plant under construction declined from 2015 to 2016 but then slightly increased from 2016 to 2017.
Property, plant and equipment, original cost Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation. General Electric Co.'s property, plant and equipment, original cost declined from 2015 to 2016 but then increased from 2016 to 2017 not reaching 2015 level.
Property, plant and equipment, net carrying value Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment. General Electric Co.'s property, plant and equipment, net carrying value declined from 2015 to 2016 but then increased from 2016 to 2017 not reaching 2015 level.

Property, Plant and Equipment Ratios (Summary)

General Electric Co., Property, Plant and Equipment Ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Average age hidden% hidden% hidden% hidden% hidden%
Estimated total useful life (years) hidden hidden hidden hidden hidden
Estimated age, time elapsed since purchase (years) hidden hidden hidden hidden hidden
Estimated remaining life (years) hidden 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. General Electric Co.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.
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. General Electric Co.'s estimated total useful life of depreciable property, plant and equipment declined from 2015 to 2016 but then slightly increased from 2016 to 2017.
Estimated time elapsed since purchase The approximate age in years of a company's fixed assets. Useful for comparison purposes. General Electric Co.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2015 to 2016 and from 2016 to 2017.
Estimated remaining life General Electric Co.'s estimated remaining life of depreciable property, plant and equipment declined from 2015 to 2016 but then slightly increased from 2016 to 2017.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Accumulated depreciation hidden hidden hidden hidden hidden
Property, plant and equipment, original cost hidden hidden hidden hidden hidden
Land and improvements hidden hidden hidden hidden hidden
Ratio
Average age1 hidden% hidden% hidden% hidden% hidden%

2017 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, original cost – Land and improvements)
= 100 × hidden ÷ (hiddenhidden) = 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. General Electric Co.'s average age of depreciable property, plant and equipment deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Property, plant and equipment, original cost hidden hidden hidden hidden hidden
Land and improvements hidden hidden hidden hidden hidden
Consolidated depreciation and amortization related to property, plant and equipment hidden hidden hidden hidden hidden
Ratio
Estimated total useful life (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Estimated total useful life (years) = (Property, plant and equipment, original cost – Land and improvements) ÷ Consolidated depreciation and amortization related to property, plant and equipment
= (hiddenhidden) ÷ 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. General Electric Co.'s estimated total useful life of depreciable property, plant and equipment declined from 2015 to 2016 but then slightly increased from 2016 to 2017.

Estimated Age, Time Elapsed Since Purchase

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Accumulated depreciation hidden hidden hidden hidden hidden
Consolidated depreciation and amortization related to property, plant and equipment hidden hidden hidden hidden hidden
Ratio
Time elapsed since purchase (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation ÷ Consolidated depreciation and amortization related to property, plant and equipment
= 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. General Electric Co.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2015 to 2016 and from 2016 to 2017.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Property, plant and equipment, net carrying value hidden hidden hidden hidden hidden
Land and improvements hidden hidden hidden hidden hidden
Consolidated depreciation and amortization related to property, plant and equipment hidden hidden hidden hidden hidden
Ratio
Estimated remaining life (years)1 hidden hidden hidden hidden hidden

2017 Calculations

1 Estimated remaining life (years) = (Property, plant and equipment, net carrying value – Land and improvements) ÷ Consolidated depreciation and amortization related to property, plant and equipment
= (hiddenhidden) ÷ hidden = hidden

Ratio Description The company
Estimated remaining life General Electric Co.'s estimated remaining life of depreciable property, plant and equipment declined from 2015 to 2016 but then slightly increased from 2016 to 2017.