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Microsoft Excel LibreOffice Calc


Analysis of Property, Plant and Equipment

Difficulty: Advanced


Property, Plant and Equipment Accounting Policy

Property, plant and equipment are stated at cost. Johnson & Johnson utilizes the straight-line method of depreciation over the estimated useful lives of the assets:

Building and building equipment 20 - 30 years
Land and leasehold improvements 10 - 20 years
Machinery and equipment 2 - 13 years

Johnson & Johnson capitalizes certain computer software and development costs, included in machinery and equipment, when incurred in connection with developing or obtaining computer software for internal use. Capitalized software costs are amortized over the estimated useful lives of the software, which generally range from 3 to 8 years.

Johnson & Johnson reviews long-lived assets to assess recoverability using undiscounted cash flows. When certain events or changes in operating or economic conditions occur, an impairment assessment may be performed on the recoverability of the carrying value of these assets. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. If quoted market prices are not available, Johnson & Johnson will estimate fair value using a discounted value of estimated future cash flows.

Source: 10-K (filing date: 2019-02-20).


Property, Plant and Equipment Disclosure

Johnson & Johnson, Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

Microsoft Excel LibreOffice Calc

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

Item Description The company
Property, plant 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. Johnson & Johnson’s property, plant and equipment, gross increased from 2016 to 2017 and from 2017 to 2018.
Property, plant 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. Johnson & Johnson’s property, plant and equipment, net increased from 2016 to 2017 and from 2017 to 2018.

Property, Plant and Equipment Ratios (Summary)

Johnson & Johnson, Property, Plant and Equipment Ratios

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
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

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

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. Johnson & Johnson’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. Johnson & Johnson’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. Johnson & Johnson’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 Johnson & Johnson’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 and from 2017 to 2018.

Average Age

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
Selected Financial Data (USD $ in millions)
Accumulated depreciation hidden hidden hidden hidden hidden
Property, plant and equipment, gross hidden hidden hidden hidden hidden
Land and land improvements hidden hidden hidden hidden hidden
Ratio
Average age1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land and land 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. Johnson & Johnson’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
Selected Financial Data (USD $ in millions)
Property, plant and equipment, gross hidden hidden hidden hidden hidden
Land and land improvements hidden hidden hidden hidden hidden
Depreciation expense, including the amortization of capitalized interest hidden hidden hidden hidden hidden
Ratio
Estimated total useful life (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Estimated total useful life (years) = (Property, plant and equipment, gross – Land and land improvements) ÷ Depreciation expense, including the amortization of capitalized interest
= (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. Johnson & Johnson’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

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
Selected Financial Data (USD $ in millions)
Accumulated depreciation hidden hidden hidden hidden hidden
Depreciation expense, including the amortization of capitalized interest hidden hidden hidden hidden hidden
Ratio
Time elapsed since purchase (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation ÷ Depreciation expense, including the amortization of capitalized interest
= 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. Johnson & Johnson’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

Microsoft Excel LibreOffice Calc
Dec 30, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 28, 2014
Selected Financial Data (USD $ in millions)
Property, plant and equipment, net hidden hidden hidden hidden hidden
Land and land improvements hidden hidden hidden hidden hidden
Depreciation expense, including the amortization of capitalized interest hidden hidden hidden hidden hidden
Ratio
Estimated remaining life (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Estimated remaining life (years) = (Property, plant and equipment, net – Land and land improvements) ÷ Depreciation expense, including the amortization of capitalized interest
= (hiddenhidden) ÷ hidden = hidden

Ratio Description The company
Estimated remaining life Johnson & Johnson’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 and from 2017 to 2018.