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footnotes, which of the following methods does Newell Brands use to depreciate its Property, Plant, and Equipment

footnotes, which of the following methods does Newell Brands use to depreciate its Property, Plant, and Equipment

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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According to the footnotes, which of the following methods does Newell Brands use to depreciate its Property, Plant, and Equipment?  

a. Straight-Line

b.Double-Declining-Balance

c.Units-of-Activity

## 1.1. Description of Business Newell Brands is a global consumer goods company featuring a diverse portfolio of renowned brands such as Rubbermaid®, Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Marmot®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Contigo®, First Alert®, Mapa®, Spontex®, and Yankee Candle®. The company is dedicated to enhancing consumer lives worldwide with planet-friendly, innovative, and attractive products that inspire joy and peace of mind. Newell Brands operates in nearly 200 countries with direct operations in over 40 of them, excluding third-party distributors. ## 6. Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. Maintenance and repair expenditures are expensed as incurred. Depreciation expense is calculated on a straight-line basis over the useful lives of buildings and improvements (20 – 40 years) and machinery and equipment (3 – 15 years). Depreciation expenses were $200 million in 2020 and $254 million in 2019. ### Table: Property and Equipment Summary (in millions) - **As of December 31, 2020** - Land: $86 - Buildings and improvements: $664 - Machinery and equipment: $2,314 - Total property, plant, and equipment: $3,064 - Accumulated depreciation: ($1,888) - Property, plant, and equipment, net: $1,176 - **As of December 31, 2019** - Land: $86 - Buildings and improvements: $641 - Machinery and equipment: $2,151 - Total property, plant, and equipment: $2,878 - Accumulated depreciation: ($1,723) - Property, plant, and equipment, net: $1,155 ## 7. Goodwill and Intangible Assets The company conducts annual evaluations and tests for goodwill impairment at the reporting unit level. Impairment is assessed if conditions suggest the fair value of a reporting unit is below its carrying amount. An impairment charge reflects the difference when the carrying value surpasses the fair value of the reporting unit. Indefinite-lived intangible assets, including trademarks and trad
Transcribed Image Text:## 1.1. Description of Business Newell Brands is a global consumer goods company featuring a diverse portfolio of renowned brands such as Rubbermaid®, Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Marmot®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Contigo®, First Alert®, Mapa®, Spontex®, and Yankee Candle®. The company is dedicated to enhancing consumer lives worldwide with planet-friendly, innovative, and attractive products that inspire joy and peace of mind. Newell Brands operates in nearly 200 countries with direct operations in over 40 of them, excluding third-party distributors. ## 6. Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. Maintenance and repair expenditures are expensed as incurred. Depreciation expense is calculated on a straight-line basis over the useful lives of buildings and improvements (20 – 40 years) and machinery and equipment (3 – 15 years). Depreciation expenses were $200 million in 2020 and $254 million in 2019. ### Table: Property and Equipment Summary (in millions) - **As of December 31, 2020** - Land: $86 - Buildings and improvements: $664 - Machinery and equipment: $2,314 - Total property, plant, and equipment: $3,064 - Accumulated depreciation: ($1,888) - Property, plant, and equipment, net: $1,176 - **As of December 31, 2019** - Land: $86 - Buildings and improvements: $641 - Machinery and equipment: $2,151 - Total property, plant, and equipment: $2,878 - Accumulated depreciation: ($1,723) - Property, plant, and equipment, net: $1,155 ## 7. Goodwill and Intangible Assets The company conducts annual evaluations and tests for goodwill impairment at the reporting unit level. Impairment is assessed if conditions suggest the fair value of a reporting unit is below its carrying amount. An impairment charge reflects the difference when the carrying value surpasses the fair value of the reporting unit. Indefinite-lived intangible assets, including trademarks and trad
**Consolidated Balance Sheets** **Newell Brands** *In millions of dollars* --- **ASSETS** - **As of Dec 31, 2020** versus **As of Dec 31, 2019** - Cash and cash equivalents: $981 | $349 - Accounts receivable, net: $1,678 | $1,842 - Inventories: $1,638 | $1,606 - Prepaid expenses and other current assets: $331 | $313 - **Total current assets**: $4,628 | $4,110 - Property, plant, and equipment, net: $1,176 | $1,155 - Goodwill: $3,553 | $3,709 - Other long-term assets: $5,343 | $6,668 - **Total assets**: $14,700 | $15,642 --- **LIABILITIES AND STOCKHOLDERS' EQUITY** - **As of Dec 31, 2020** versus **As of Dec 31, 2019** - Accounts payable: $1,526 | $1,102 - Wages payable: $236 | $204 - Current portion of long-term debt: $466 | $332 - Other current liabilities: $1,393 | $1,340 - **Total current liabilities**: $3,621 | $2,978 - Long-term debt: $5,141 | $5,391 - Other noncurrent liabilities: $2,038 | $2,277 - **Total liabilities**: $10,800 | $10,646 - Common stock: $3,448 | $4,447 - Retained earnings: $452 | $549 - **Total stockholders' equity**: $3,900 | $4,996 - **Total liabilities and stockholders' equity**: $14,700 | $15,642 This balance sheet provides a snapshot of Newell Brands' financial position at the end of two fiscal years. It includes key components such as assets, liabilities, and stockholders' equity, allowing for a comparative analysis between the two years.
Transcribed Image Text:**Consolidated Balance Sheets** **Newell Brands** *In millions of dollars* --- **ASSETS** - **As of Dec 31, 2020** versus **As of Dec 31, 2019** - Cash and cash equivalents: $981 | $349 - Accounts receivable, net: $1,678 | $1,842 - Inventories: $1,638 | $1,606 - Prepaid expenses and other current assets: $331 | $313 - **Total current assets**: $4,628 | $4,110 - Property, plant, and equipment, net: $1,176 | $1,155 - Goodwill: $3,553 | $3,709 - Other long-term assets: $5,343 | $6,668 - **Total assets**: $14,700 | $15,642 --- **LIABILITIES AND STOCKHOLDERS' EQUITY** - **As of Dec 31, 2020** versus **As of Dec 31, 2019** - Accounts payable: $1,526 | $1,102 - Wages payable: $236 | $204 - Current portion of long-term debt: $466 | $332 - Other current liabilities: $1,393 | $1,340 - **Total current liabilities**: $3,621 | $2,978 - Long-term debt: $5,141 | $5,391 - Other noncurrent liabilities: $2,038 | $2,277 - **Total liabilities**: $10,800 | $10,646 - Common stock: $3,448 | $4,447 - Retained earnings: $452 | $549 - **Total stockholders' equity**: $3,900 | $4,996 - **Total liabilities and stockholders' equity**: $14,700 | $15,642 This balance sheet provides a snapshot of Newell Brands' financial position at the end of two fiscal years. It includes key components such as assets, liabilities, and stockholders' equity, allowing for a comparative analysis between the two years.
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