Can you please help with the below question and provide direction on how to go about answering? Walmart makes significant investments in operating capacity, primarily via investments in property, plant, and equipment, but also via investments in wholly and partially owned subsidiaries. Walmart also has significant non-U.S. operations in its Walmart International segment. The Consolidated Financial Statements accompanying notes, which describe these significant investments is below. The question is stated as: Estimate the average total estimated useful life of depreciable property, plant, and equipment. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain. How should an analyst interpret fluctuations in this estimate for a given company over time? How should an analyst interpret fluctuations in this estimate between a company and its competitors? Estimate the average age of depreciable assets, the percentage of PP&E that has been used up, and the remaining useful life. How might an analyst use this information? Has Walmart recognized impairments of property, plant and equipment or goodwill during the fiscal year ending January 31, 2016? Why is it important for an analyst to know the answer to this question? Under U.S. GAAP, the impairment tests for goodwill and PP&E are different. Describe the main difference. Walmart must consolidate subsidiaries that are partially owned. Evidence of this fact can be found on the income statement, the balance sheet, and the statement of cash flows, where noncontrolling interests in net income, noncontrolling interest in net assets, and cash flows related to noncontrolling interests are referenced. Explain the meaning of the noncontrolling interest in net income and the noncontrolling interests in net assets. Generally speaking, firms, including firms that are partially owned subsidiaries, pay out only a portion of their net income during a period (i.e., the dividend payout ratio is generally less than one). The January 21, 2016, balance sheet reports a decreae in noncontrolling interest in net assets. Do other statements provide evidence as to what might have happened? What was the gain or loss from foreign currency translation for the year ended January 31, 2016? Where is it reported, and what is the rationale for reporting it there? What happened to foreign exchange rates during the year? Consolidated Statements of Income Fiscal Years Ended January 31, (Amounts in millions, except per share data) 2016 2015 2014 Revenues: Net sales $478,614 $482,229 $473,076 Membership and other income 3,516 3,422 3,218 Total revenues 482,130 485,651 476,294 Costs and expenses: Cost of sales 360,984 365,086 358,069 Operating, selling, general and administrative expenses 97,041 93,418 91,353 Operating income 24,105 27,147 26,872 Interest: Debt 2,027 2,161 2,072 Capital lease and financing obligations 521 300 263 Interest income (81) (113) (119) Interest, net 2,467 2,348 2,216 Income from continuing operations before income taxes 21,638 24,799 24,656 Provision for income taxes: Current 7,584 8,504 8,619 Deferred (1,026) (519) (514) Total provision for income taxes 6,558 7,985 8,105 Income from continuing operations 15,080 16,814 16,551 Income from discontinued operations, net of income taxes 285 144 Consolidated net income 15,080 17,099 16,695 Consolidated net income attributable to noncontrolling interest (386) (736) (673) Consolidated net income attributable to Walmart $ 14,694 $ 16,363 $ 16,022 Basic net income per common share: Basic income per common share from continuing operations attributable to Walmart $ 4.58 $ 5.01 $ 4.87 Basic income per common share from discontinued operations attributable to Walmart 0.06 0.03 Basic net income per common share attributable to Walmart $ 4.58 $ 5.07 $ 4.90 Diluted net income per common share: Diluted income per common share from continuing operations attributable to Walmart $ 4.57 $ 4.99 $ 4.85 Diluted income per common share from discontinued operations attributable to Walmart 0.06 0.03 Diluted net income per common share attributable to Walmart $ 4.57 $ 5.05 $ 4.88 Weighted-average common shares outstanding: Basic 3,207 3,230 3,269 Diluted 3,217 3,243 3,283 Dividends declared per common share $ 1.96 $ 1.92 $ 1.88 Consolidated Statements of Comprehensive Income Fiscal Years Ended January 31, (Amounts in millions) 2016 2015 2014 Consolidated net income $15,080 $17,099 $16,695 Less consolidated net income attributable to nonredeemable noncontrolling interest (386) (736) (606) Less consolidated net income attributable to redeemable noncontrolling interest (67) Consolidated net income attributable to Walmart 14,694 16,363 16,022 Other comprehensive income (loss), net of income taxes Currency translation and other (5,220) (4,558) (3,221) Net investment hedges 366 379 75 Cash flow hedges (202) (470) 207 Minimum pension liability 86 (69) 153 Other comprehensive income (loss), net of income taxes (4,970) (4,718) (2,786) Less other comprehensive income (loss) attributable to nonredeemable noncontrolling interest 541 546 311 Less other comprehensive income (loss) attributable to redeemable noncontrolling interest 66 Other comprehensive income (loss) attributable to Walmart (4,429) (4,172) (2,409) Comprehensive income, net of income taxes 10,110 12,381 13,909 Less comprehensive income (loss) attributable to nonredeemable noncontrolling interest 155 (190) (295) Less comprehensive income (loss) attributable to redeemable noncontrolling interest (1) Comprehensive income attributable to Walmart $10,265 $12,191 $13,613 Consolidated Balance Sheets Fiscal Years Ended January 31, (Amounts in millions) 2016 2015 ASSETS Current assets: Cash and cash equivalents $ 8,705 $ 9,135 Receivables, net 5,624 6,778 Inventories 44,469 45,141 Prepaid expenses and other 1,441 2,224 Total current assets 60,239 63,278 Property and equipment: Property and equipment 176,958 177,395 Less accumulated depreciation (66,787) (63,115) Property and equipment, net 110,171 114,280 Property under capital lease and financing obligations: Property under capital lease and financing obligations 11,096 5,239 Less accumulated amortization (4,751) (2,864) Property under capital lease and financing obligations, net 6,345 2,375 Goodwill 16,695 18,102 Other assets and deferred charges 6,131 5,455 Total assets $199,581 $203,490 LIABILITIES AND EQUITY Current liabilities: Short-term borrowings $ 2,708 $ 1,592 Accounts payable 38,487 38,410 Accrued liabilities 19,607 19,152 Accrued income taxes 521 1,021 Long-term debt due within one year 2,745 4,791 Capital lease and financing obligations due within one year 551 287 Total current liabilities 64,619 65,253 Long-term debt 38,214 40,889 Long-term capital lease and financing obligations 5,816 2,606 Deferred income taxes and other 7,321 8,805 Commitments and contingencies Equity: Common stock 317 323 Capital in excess of par value 1,805 2,462 Retained earnings 90,021 85,777 Accumulated other comprehensive income (loss) (11,597) (7,168) Total Walmart shareholders equity 80,546 81,394 Nonredeemable noncontrolling interest 3,065 4,543 Total equity 83,611 85,937 Total liabilities and equity $199,581 $203,490 Consolidated Statements of Shareholders Equity and Redeemable Noncontrolling Interest Accumulated Total Capital in Other Walmart Nonredeemable Redeemable Common Stock Excess of Retained Comprehensive Shareholders Noncontrolling Total Noncontrolling (Amounts in millions) Shares Amount Par Value Earnings Income (Loss) Equity Interest Equity Interest Balances as of February 1, 2013 3,314 $332 $ 3,620 $ 72,978 $ (587) $ 76,343 $ 5,395 $ 81,738 $ 519 Consolidated net income 16,022 16,022 595 16,617 78 Other comprehensive income, net of income taxes (2,409) (2,409) (311) (2,720) (66) Cash dividends declared ($1.88 per share) (6,139) (6,139) (6,139) Purchase of Company stock (87) (9) (294) (6,254) (6,557) (6,557) Redemption value adjustment of redeemable noncontrolling interest (1,019) (1,019) (1,019) 1,019 Other 6 55 (41) 14 (595) (581) (59) Balances as of January 31, 2014 3,233 323 2,362 76,566 (2,996) 76,255 5,084 81,339 1,491 Consolidated net income 16,363 16,363 736 17,099 Other comprehensive loss, net of income taxes (4,172) (4,172) (546) (4,718) Cash dividends declared ($1.92 per share) (6,185) (6,185) (6,185) Purchase of Company stock (13) (1) (29) (950) (980) (980) Purchase of redeemable noncontrolling interest (1,491) Other 8 1 129 (17) 113 (731) (618) Balances as of January 31, 2015 3,228 323 2,462 85,777 (7,168) 81,394 4,543 85,937 Consolidated net income 14,694 14,694 386 15,080 Other comprehensive income, net of income taxes (4,429) (4,429) (541) (4,970) Cash dividends declared ($1.96 per share) (6,294) (6,294) (6,294) Purchase of Company stock (65) (6) (102) (4,148) (4,256) (4,256) Cash dividend declared to noncontrolling interest (691) (691) Other (1) (555) (8) (563) (632) (1,195) Balances as of January 31, 2016 3,162 $317 $1,805 $90,021 $(11,597) $80,546 $3,065 $83,611 $ Consolidated Statements of Cash Flows Fiscal Years Ended January 31, (Amounts in millions) 2016 2015 2014 Cash flows from operating activities: Consolidated net income $ 15,080 $ 17,099 $ 16,695 Income from discontinued operations, net of income taxes (285) (144) Income from continuing operations 15,080 16,814 16,551 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 9,454 9,173 8,870 Deferred income taxes (672) (503) (279) Other operating activities 1,410 785 938 Changes in certain assets and liabilities, net of effects of acquisitions: Receivables, net (19) (569) (566) Inventories (703) (1,229) (1,667) Accounts payable 2,008 2,678 531 Accrued liabilities 1,303 1,249 103 Accrued income taxes (472) 166 (1,224) Net cash provided by operating activities 27,389 28,564 23,257 Cash flows from investing activities: Payments for property and equipment (11,477) (12,174) (13,115) Proceeds from disposal of property and equipment 635 570 727 Proceeds from disposal of certain operations 246 671 Other investing activities (79) (192) (138) Net cash used in investing activities (10,675) (11,125) (12,526) Cash flows from financing activities: Net change in short-term borrowings 1,235 (6,288) 911 Proceeds from issuance of long-term debt 39 5,174 7,072 Payments of long-term debt (4,432) (3,904) (4,968) Dividends paid (6,294) (6,185) (6,139) Purchase of Company stock (4,112) (1,015) (6,683) Dividends paid to noncontrolling interest (719) (600) (426) Purchase of noncontrolling interest (1,326) (1,844) (296) Other financing activities (513) (409) (260) Net cash used in financing activities (16,122) (15,071) (10,789) Effect of exchange rates on cash and cash equivalents (1,022) (514) (442) Net increase (decrease) in cash and cash equivalents (430) 1,854 (500) Cash and cash equivalents at beginning of year 9,135 7,281 7,781 Cash and cash equivalents at end of period $ 8,705 $ 9,135 $ 7,281 Supplemental disclosure of cash flow information: Income taxes paid 8,111 8,169 8,641 Interest paid 2,540 2,433 2,362 Notes Property and Equipment Property and equipment are stated at cost. Gains or losses on disposition are recognized as earned or incurred. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. The following table summarizes the Companys property and equipment balances and includes the estimated useful lives that are generally used to depreciate the assets on a straight-line basis: Fiscal Years Ended January 31, Estimated (Amounts in millions) Useful Lives 2016 2015 Land N/A $ 25,624 $ 26,261 Buildings and improvements 3-40 years 96,845 97,496 Fixtures and equipment 1-30 years 47,033 45,044 Transportation equipment 3-15 years 2,917 2,807 Construction in progress N/A 4,539 5,787 Property and equipment $176,958 $177,395 Accumulated depreciation (66,787) (63,115) Property and equipment, net $110,171 $114,280 The Companys reporting units were evaluated using a quantitative impairment test. Management determined the fair value of each reporting unit is greater than the carrying amount and, accordingly, the Company has not recorded any impairment charges related to goodwill. The following table reflects goodwill activity, by reportable segment, for fiscal 2016 and 2015: Walmart (Amounts in millions) Walmart U.S. International Sams Club Total Balances as of February 1, 2014 $451 $18,746 $313 $19,510 Changes in currency translation and other (1,418) (1,418) Acquisitions(1) 10 10 Balances as of January 31, 2015 461 17,328 313 18,102 Changes in currency translation and other (1,412) (1,412) Acquisitions(1) 5 5 Balances as of January 31, 2016 $461 $15,921 $313 $16,695 (1) G oodwill recorded for fiscal 2016 and 2015 acquisitions relates to acquisitions that are not significant, individually or in the aggregate, to the Companys Consolidated Financial Statements. Indefinite-lived intangible assets are included in other assets and deferred charges in the Companys Consolidated Balance Sheets. These assets are evaluated for impairment based on their fair values using valu- ation techniques which are updated annually based on the most recent variables and assumptions. There were no impairment charges related to indefinite-lived intangible assets recorded for fiscal 2016, 2015 and 2014.