Switch to:
Walt Disney Co  (NYSE:DIS) Depreciation, Depletion and Amortization: \$2,763 Mil (TTM As of Jun. 2017)

Walt Disney Co's depreciation, depletion and amortization for the three months ended in Jun. 2017 was \$711 Mil. Its depreciation, depletion and amortization for the trailing twelve months (TTM) ended in Jun. 2017 was \$2,763 Mil.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Walt Disney Co Annual Data

 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17 Depreciation, Depletion and Amortization 2,192.00 2,288.00 2,354.00 2,527.00 2,782.00

Walt Disney Co Quarterly Data

 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Depreciation, Depletion and Amortization 689.00 687.00 676.00 711.00 708.00

Calculation

Depreciation is a present expense that accounts for the past cost of an asset that is now providing benefits.

Depletion and amortization are synonyms for depreciation.

Generally:
The term depreciation is used when discussing man made tangible assets
The term depletion is used when discussing natural tangible assets
The term amortization is used when discussing intangible assets

Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Jun. 2017 was 689 (Sep. 2016 ) + 687 (Dec. 2016 ) + 676 (Mar. 2017 ) + 711 (Jun. 2017 ) = \$2,763 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

One of the key tenets of Generally Accepted Accounting Principles (GAAP) is the matching principle. The matching principle states that companies should report associated costs and benefits at the same time.

For example:

If a company buys a \$300 million cruise ship in 1982 and then sells tickets to passengers for the next 30 years, the company should not report a \$300 million expense in 1982 and then ticket sales for 1982 through 2012. Instead, the company should spread the purchase price of the ship (the cost) over the same time period it sells tickets (the benefit).

To create income statements that meet the matching principle, accountants use an expense called depreciation.

So, instead of reporting a \$300 million purchase expense in 1982, the company might:

Report a \$30 million depreciation expense in 1982, 1983, 1984...and every year after that for the 30 years the company expects to sell tickets to passengers on this cruise ship.

To calculate depreciation, a company must make estimates and choices such as:

The cost of the asset
The useful life of the asset
The salvage value of the asset at the end of its useful life
And a way of spreading the cost of the asset to match the time when the asset provides benefits

The range of different ways of spreading the cost under GAAP accounting is too long to list. However, public companies in the United States explain their depreciation choices to shareholders in a note to their financial statements. It is critical that investors read this note. Investors can find this note in the company's 10-K.

Past depreciation expenses accumulate on the balance sheet. Most public companies choose not to show this contra asset account on the balance sheet they present to shareholders. Instead, they simply show a single item. This single asset item may be marked Net. Such as Property, Plant, and Equipment - Net. It is actually the asset account netted against the contra asset account.

A contra asset account is an account that offsets an asset account. So, for example a company might have:

Property, Plant, and Equipment - Gross: \$150 million
Accumulated Depreciation: \$120 million
Property, Plant, and Equipment - Net: \$30 million

In this case, the only item likely to be shown on the balance sheet is Property, Plant, and Equipment - Net. This is the cost of the company's property, plant, and equipment (asset account) minus the accumulated depreciation (the contra asset account). It means the company's assets cost \$150 million, the company has reported \$120 million in depreciation expense over the years, and the company is now reporting the assets have a book value of \$30 million.

It is possible for a company to have fully depreciated assets on its balance sheet. This means the company's estimate of the useful life of the asset was shorter than the asset's actual useful life. As a result, the asset - although it is still being used - is carried on the balance sheet at its salvage value.

This is a reminder that depreciation involves estimates and choices. It is not an infallible process.

Companies do not have cash layout for depreciation. Therefore, depreciation is added back in the cash flow statement.

Although depreciation is not a cash cost, it is a real business cost because the company has to pay for the fixed assets when it purchases them. Both Warren Buffett and Charlie Munger hate the idea of EDITDA because depreciation is not included as an expense. Warren Buffett even jokingly said We prefer earnings before everything when criticizing the abuse of EDITDA.

Be Aware

Depreciation estimates make the calculation of net income susceptible to management's accounting choices. These choices can be either overly aggressive or overly conservative.

Related Terms

From the Internet

###### 3 Value Stocks for Retirement

- Fool 2017-11-18 09:00:00

###### Sears Falls as Former Director Dumps Stake; AT&T Debt Concerns Bubble -- ICYMI

- theStreet 2017-11-17 19:38:00

###### Media companies must think huge to survive, analyst says

- cnbc 2017-11-17 18:42:51

###### Why Twenty-First Century Fox Inc. Shares Popped 7% Today

- Fool 2017-11-17 16:56:00

###### Retail Rally and Crude Gains Can't Stop Wall Street Retreat

- theStreet 2017-11-17 16:11:00

###### Activision Blizzard's Latest "Call of Duty" Game Looks Like a Big Hit

- Fool 2017-11-17 16:07:00

###### E-Sports Watch: Star Wars Player Revolt Explained & Goodbye Marvel Heroes

- theStreet 2017-11-17 15:48:00

###### Comcast, Disney, Fox: Questioning Their Urge to Merge

- Barron's 2017-11-17 14:37:51

###### Will There Be a Bidding War for 21st Century Fox's Major Assets?

- Zacks 2017-11-17 14:22:00

###### Fox's Murdochs at 21st century crossroad

- theStreet 2017-11-17 14:00:00

###### Box Office Preview: Superhero Mashup 'Justice League' Aims for \$110 Million Open

- theStreet 2017-11-17 13:23:00

###### Comcast, Disney, Fox: Urge to Merge is Questionable, Says Media Reporter Auletta

- Barron's 2017-11-17 13:18:00

###### Comcast Is a Breakout Candidate in the Bidding War for Fox

- theStreet 2017-11-17 12:54:00

###### Wells Fargo on Any Comcast Interest in Fox: 'We Just Don't Believe It'

- theStreet 2017-11-17 12:28:00

###### Benchmark Indexes Lower but Retail Shares Rally

- theStreet 2017-11-17 12:12:00

###### Video: Jim Cramer on a Potential Comcast-21st Century Fox Deal

- theStreet 2017-11-17 11:51:00

###### Wall Street Pulls Back Even as Retailers Rally, Nasdaq Retreats From Records

- theStreet 2017-11-17 11:45:00

###### Netflix’s new film ‘Mudbound’ is strong contender for a major award

- MarketWatch 2017-11-17 11:04:00

###### Wall Street Dips as Stocks Ease Off Record Rally

- theStreet 2017-11-17 09:36:00

###### What’s behind the sudden upswing in nostalgia from the 1990s?

- MarketWatch 2017-11-17 09:13:00

###### How the need for scale drives Fox, Mashable and Time deals

- theStreet 2017-11-17 09:02:00

###### Princes William and Harry will be stormtroopers in ‘Star Wars: The Last Jedi’

- MarketWatch 2017-11-17 08:36:00

###### Dow 30 Stock Roundup: GE Cuts Dividend, Wal-Mart, Home Depot Beat

- Zacks 2017-11-17 08:33:00

###### Are Comcast and Verizon Eyeing 21st Century Fox's Assets?

- Zacks 2017-11-17 07:41:00

###### Stock Futures Ease After Rally Sends Nasdaq to New Record

- theStreet 2017-11-17 07:37:00

###### Comcast and Verizon Reportedly Join the Pursuit for 21st Century Fox

- theStreet 2017-11-17 07:03:00

###### Wall Street Breakfast Nafta Talks Resume Mexico City

- Seekingalpha 2017-11-17 06:36:38

###### Taxes, Fox and Tesla - 5 Things You Must Know Before the Market Opens Friday

- theStreet 2017-11-17 06:01:00

###### 40 Dividend Stocks Battling 2018

- Seekingalpha 2017-11-17 03:46:42

###### Comcast, Verizon Interest in Fox Sends Sky Stock Up

- theStreet 2017-11-17 03:27:00

###### Dividend Challengers Near Challengers 58 Increases Expected End January

- Seekingalpha 2017-11-17 00:45:31

###### Fox Hunt Widens as Comcast, Verizon Reportedly Join Pursuit

- theStreet 2017-11-16 20:37:00

###### Comcast seeks to buy significant part of Fox; Verizon interested too

- MarketWatch 2017-11-16 19:12:00

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)