Microsoft Excel LibreOffice Calc

Procter & Gamble Co. (PG)


Analysis of Property, Plant and Equipment

Advanced level


Accounting Policy on Property, Plant and Equipment

Property, plant and equipment is recorded at cost reduced by accumulated depreciation. Depreciation expense is recognized over the assets’ estimated useful lives using the straight-line method. Machinery and equipment includes office furniture and fixtures (15-year life), computer equipment and capitalized software (3- to 5-year lives) and manufacturing equipment (3- to 20-year lives). Buildings are depreciated over an estimated useful life of 40 years. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts.

Source: 10-K (filing date: 2019-08-06).


Property, Plant and Equipment Disclosure

Procter & Gamble Co., balance sheet: property, plant and equipment

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Buildings 7,746  7,188  6,943  6,885  7,209  8,022 
Machinery and equipment 32,263  30,595  29,505  29,506  30,346  32,398 
Land 805  841  765  769  795  893 
Construction in progress 2,579  3,223  2,935  2,706  2,997  3,114 
Property, plant and equipment, gross 43,393  41,847  40,148  39,866  41,347  44,427 
Accumulated depreciation (22,122) (21,247) (20,255) (20,481) (21,079) (22,123)
Property, plant and equipment, net 21,271  20,600  19,893  19,385  20,268  22,304 

Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).

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. Procter & Gamble Co.’s property, plant and equipment, gross increased from 2017 to 2018 and from 2018 to 2019.
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. Procter & Gamble Co.’s property, plant and equipment, net increased from 2017 to 2018 and from 2018 to 2019.

Asset Age Ratios (Summary)

Procter & Gamble Co., asset age ratios

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Average age ratio 51.94% 51.81% 51.43% 52.39% 51.98% 50.82%

Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).

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. Procter & Gamble Co.’s average age ratio of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.

Average Age

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Selected Financial Data (US$ in millions)
Accumulated depreciation 22,122  21,247  20,255  20,481  21,079  22,123 
Property, plant and equipment, gross 43,393  41,847  40,148  39,866  41,347  44,427 
Land 805  841  765  769  795  893 
Asset Age Ratio
Average age1 51.94% 51.81% 51.43% 52.39% 51.98% 50.82%

Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).

2019 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land)
= 100 × 22,122 ÷ (43,393805) = 51.94%

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. Procter & Gamble Co.’s average age ratio of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.