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Property, plant and equipment

Factories, buildings and equipment at cost minus depreciation, how capex and depreciation relate, and Apple's and P&G's 10-Ks.

The short answer

Property, plant and equipment, often shortened to PP&E, is a company's land, buildings, machinery and other long-lived physical assets, reported at cost minus accumulated depreciation. Buying those assets shows up as capital expenditure on the cash flow statement; using them up shows up as depreciation on the income statement. Unlike inventory, PP&E is not meant to be sold in the ordinary course of business.

Cost, then depreciation

Apple's 10-K for fiscal 2026 states the measurement in two sentences: property, plant and equipment are stated at cost, and depreciation on property, plant and equipment is recognized on a straight-line basis. Cost is what the company paid to acquire or build the asset, including amounts needed to bring it into use. Straight-line depreciation spreads that cost, minus any expected residual value, evenly over the asset's estimated useful life. Land is typically not depreciated. The balance-sheet line is usually "property, plant and equipment, net," which means after accumulated depreciation. Procter & Gamble's balance sheet uses that heading.

Source: Apple 10-K for fiscal 2026, filed Nov 3, 2026 · Procter & Gamble 10-K for fiscal 2026, filed Aug 4, 2026

Where cash and expense show up

When a company buys equipment, the cash leaves in the investing section of the cash flow statement as capital expenditure. Apple's purchases of property, plant and equipment in fiscal 2026 were $9.0B. Depreciation and amortization for the same year was $13.4B. Capital expenditures and depreciation, amortization and EBITDA walk through those two figures. The two are not the same amount in any given year: a company can spend heavily on new assets in a year when depreciation still reflects purchases made years earlier.

What the line leaves out

Older assets may be worth more, or less, than their book value. Land bought decades ago stays at historical cost. Equipment can become obsolete faster than it is depreciated.
Assets the company leases appear separately as right-of-use assets. Leases on the balance sheet covers those.
Internally developed brands and software are mostly not in PP&E. Acquired intangibles and goodwill have their own lines.
Impairment. If an asset's value falls below its carrying amount, the company may write it down. That charge is separate from ordinary depreciation.

Common questions

What is property, plant and equipment?

The long-lived physical assets a company uses in the business: land, buildings, machinery, equipment, and similar items, reported at cost minus accumulated depreciation.

What does 'net' mean on the PP&E line?

Net of accumulated depreciation. The original cost is reduced by the depreciation taken so far. P&G labels the line 'property, plant and equipment, net.'

How is PP&E different from capital expenditure?

PP&E is the stock of assets on the balance sheet. Capital expenditure is the cash spent in a period to add to that stock. Apple's fiscal 2026 purchases of property, plant and equipment are the capex figure.

Why isn't land depreciated?

Land is not used up in the same way a machine is. Buildings and equipment are depreciated; land usually remains at cost unless it is impaired or sold.

Where do I find useful lives?

In the accounting-policy note for PP&E, which often lists ranges such as 3 to 5 years for computers and several decades for buildings. Apple's 10-K states that it uses the straight-line method.

Disclosures

Editor holdings: The editor holds no position in any company named on this page. As of Nov 11, 2026.
Compensation: Nobody paid for this page. No affiliate links on this page.
Sources: Each company's own SEC filings, linked next to each number.
Last updated: Nov 10, 2026

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