acn-20220531FALSE2022Q300014673738/31P3MP1Y00014673732021-09-012022-05-310001467373us-gaap:CommonClassAMember2022-06-09xbrli:shares0001467373acn:CommonClassXMember2022-06-0900014673732022-05-31iso4217:USD00014673732021-08-310001467373acn:OrdinarySharesMember2021-08-31iso4217:EURxbrli:shares0001467373acn:OrdinarySharesMember2022-05-310001467373us-gaap:CommonClassAMember2021-08-31iso4217:USDxbrli:shares0001467373us-gaap:CommonClassAMember2022-05-310001467373acn:CommonClassXMember2021-08-310001467373acn:CommonClassXMember2022-05-3100014673732022-03-012022-05-3100014673732021-03-012021-05-3100014673732020-09-012021-05-310001467373us-gaap:CommonStockMemberacn:OrdinarySharesMember2022-02-280001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-02-280001467373acn:CommonClassXMemberus-gaap:CommonStockMember2022-02-280001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2022-02-280001467373us-gaap:AdditionalPaidInCapitalMember2022-02-280001467373us-gaap:TreasuryStockMember2022-02-280001467373us-gaap:RetainedEarningsMember2022-02-280001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-02-280001467373us-gaap:ParentMember2022-02-280001467373us-gaap:NoncontrollingInterestMember2022-02-2800014673732022-02-280001467373us-gaap:RetainedEarningsMember2022-03-012022-05-310001467373us-gaap:ParentMember2022-03-012022-05-310001467373us-gaap:NoncontrollingInterestMember2022-03-012022-05-310001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-012022-05-310001467373us-gaap:AdditionalPaidInCapitalMember2022-03-012022-05-310001467373us-gaap:TreasuryStockMember2022-03-012022-05-310001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2022-03-012022-05-310001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-03-012022-05-310001467373us-gaap:CommonStockMemberacn:OrdinarySharesMember2022-05-310001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-05-310001467373acn:CommonClassXMemberus-gaap:CommonStockMember2022-05-310001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2022-05-310001467373us-gaap:AdditionalPaidInCapitalMember2022-05-310001467373us-gaap:TreasuryStockMember2022-05-310001467373us-gaap:RetainedEarningsMember2022-05-310001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-05-310001467373us-gaap:ParentMember2022-05-310001467373us-gaap:NoncontrollingInterestMember2022-05-310001467373us-gaap:CommonStockMemberacn:OrdinarySharesMember2021-02-280001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-02-280001467373acn:CommonClassXMemberus-gaap:CommonStockMember2021-02-280001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2021-02-280001467373us-gaap:AdditionalPaidInCapitalMember2021-02-280001467373us-gaap:TreasuryStockMember2021-02-280001467373us-gaap:RetainedEarningsMember2021-02-280001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-02-280001467373us-gaap:ParentMember2021-02-280001467373us-gaap:NoncontrollingInterestMember2021-02-2800014673732021-02-280001467373us-gaap:RetainedEarningsMember2021-03-012021-05-310001467373us-gaap:ParentMember2021-03-012021-05-310001467373us-gaap:NoncontrollingInterestMember2021-03-012021-05-310001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-012021-05-310001467373us-gaap:AdditionalPaidInCapitalMember2021-03-012021-05-310001467373us-gaap:TreasuryStockMember2021-03-012021-05-310001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2021-03-012021-05-310001467373acn:CommonClassXMemberus-gaap:CommonStockMember2021-03-012021-05-310001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-03-012021-05-310001467373us-gaap:CommonStockMemberacn:OrdinarySharesMember2021-05-310001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-05-310001467373acn:CommonClassXMemberus-gaap:CommonStockMember2021-05-310001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2021-05-310001467373us-gaap:AdditionalPaidInCapitalMember2021-05-310001467373us-gaap:TreasuryStockMember2021-05-310001467373us-gaap:RetainedEarningsMember2021-05-310001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-05-310001467373us-gaap:ParentMember2021-05-310001467373us-gaap:NoncontrollingInterestMember2021-05-3100014673732021-05-310001467373us-gaap:CommonStockMemberacn:OrdinarySharesMember2021-08-310001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-08-310001467373acn:CommonClassXMemberus-gaap:CommonStockMember2021-08-310001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2021-08-310001467373us-gaap:AdditionalPaidInCapitalMember2021-08-310001467373us-gaap:TreasuryStockMember2021-08-310001467373us-gaap:RetainedEarningsMember2021-08-310001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-08-310001467373us-gaap:ParentMember2021-08-310001467373us-gaap:NoncontrollingInterestMember2021-08-310001467373us-gaap:RetainedEarningsMember2021-09-012022-05-310001467373us-gaap:ParentMember2021-09-012022-05-310001467373us-gaap:NoncontrollingInterestMember2021-09-012022-05-310001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-012022-05-310001467373us-gaap:AdditionalPaidInCapitalMember2021-09-012022-05-310001467373us-gaap:TreasuryStockMember2021-09-012022-05-310001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2021-09-012022-05-310001467373acn:CommonClassXMemberus-gaap:CommonStockMember2021-09-012022-05-310001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-09-012022-05-310001467373us-gaap:CommonStockMemberacn:OrdinarySharesMember2020-08-310001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2020-08-310001467373acn:CommonClassXMemberus-gaap:CommonStockMember2020-08-310001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2020-08-310001467373us-gaap:AdditionalPaidInCapitalMember2020-08-310001467373us-gaap:TreasuryStockMember2020-08-310001467373us-gaap:RetainedEarningsMember2020-08-310001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-08-310001467373us-gaap:ParentMember2020-08-310001467373us-gaap:NoncontrollingInterestMember2020-08-3100014673732020-08-310001467373us-gaap:RetainedEarningsMember2020-09-012021-05-310001467373us-gaap:ParentMember2020-09-012021-05-310001467373us-gaap:NoncontrollingInterestMember2020-09-012021-05-310001467373us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-012021-05-310001467373us-gaap:AdditionalPaidInCapitalMember2020-09-012021-05-310001467373us-gaap:TreasuryStockMember2020-09-012021-05-310001467373us-gaap:CommonStockMemberus-gaap:RestrictedStockUnitsRSUMember2020-09-012021-05-310001467373acn:CommonClassXMemberus-gaap:CommonStockMember2020-09-012021-05-310001467373us-gaap:CommonStockMemberus-gaap:CommonClassAMember2020-09-012021-05-310001467373acn:DuckCreekEquityMethodInvestmentMember2022-05-31xbrli:pure00014673732022-06-012022-05-3100014673732022-09-012022-05-310001467373us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2021-09-012022-05-310001467373country:RU2021-09-012022-05-310001467373srt:NorthAmericaMember2021-08-310001467373srt:NorthAmericaMember2021-09-012022-05-310001467373srt:NorthAmericaMember2022-05-310001467373srt:EuropeMember2021-08-310001467373srt:EuropeMember2021-09-012022-05-310001467373srt:EuropeMember2022-05-310001467373acn:GrowthMarketsMember2021-08-310001467373acn:GrowthMarketsMember2021-09-012022-05-310001467373acn:GrowthMarketsMember2022-05-310001467373us-gaap:CustomerRelatedIntangibleAssetsMember2021-08-310001467373us-gaap:CustomerRelatedIntangibleAssetsMember2022-05-310001467373us-gaap:TechnologyBasedIntangibleAssetsMember2021-08-310001467373us-gaap:TechnologyBasedIntangibleAssetsMember2022-05-310001467373us-gaap:PatentsMember2021-08-310001467373us-gaap:PatentsMember2022-05-310001467373us-gaap:OtherIntangibleAssetsMember2021-08-310001467373us-gaap:OtherIntangibleAssetsMember2022-05-310001467373acn:DividendPaymentNovember2021Member2021-09-012022-05-310001467373acn:DividendPaymentNovember2021Memberus-gaap:CommonClassAMember2021-10-142021-10-140001467373acn:AccentureHoldingsPlcOrdinarySharesAndAccentureCanadaHoldingsIncExchangeableSharesMemberacn:DividendPaymentNovember2021Member2021-10-122021-10-120001467373acn:DividendPaymentFebruary2022Member2021-09-012022-05-310001467373acn:DividendPaymentFebruary2022Memberus-gaap:CommonClassAMember2022-01-132022-01-130001467373acn:AccentureHoldingsPlcOrdinarySharesAndAccentureCanadaHoldingsIncExchangeableSharesMemberacn:DividendPaymentFebruary2022Member2022-01-112022-01-110001467373acn:DividendPaymentMay2022Member2021-09-012022-05-310001467373acn:DividendPaymentMay2022Memberus-gaap:CommonClassAMember2022-04-142022-04-140001467373acn:AccentureHoldingsPlcOrdinarySharesAndAccentureCanadaHoldingsIncExchangeableSharesMemberacn:DividendPaymentMay2022Member2022-04-122022-04-120001467373us-gaap:CommonClassAMember2021-09-012022-05-310001467373acn:AccentureCanadaHoldingsIncExchangeableSharesMember2021-09-012022-05-310001467373us-gaap:RestrictedStockUnitsRSUMember2021-09-012022-05-310001467373us-gaap:SubsequentEventMember2022-06-220001467373us-gaap:OtherCurrentAssetsMemberus-gaap:CashFlowHedgingMember2022-05-310001467373us-gaap:OtherCurrentAssetsMemberus-gaap:CashFlowHedgingMember2021-08-310001467373us-gaap:OtherAssetsMemberus-gaap:CashFlowHedgingMember2022-05-310001467373us-gaap:OtherAssetsMemberus-gaap:CashFlowHedgingMember2021-08-310001467373us-gaap:OtherCurrentAssetsMemberacn:OtherDerivativeInstrumentsMember2022-05-310001467373us-gaap:OtherCurrentAssetsMemberacn:OtherDerivativeInstrumentsMember2021-08-310001467373us-gaap:OtherCurrentLiabilitiesMemberus-gaap:CashFlowHedgingMember2022-05-310001467373us-gaap:OtherCurrentLiabilitiesMemberus-gaap:CashFlowHedgingMember2021-08-310001467373us-gaap:OtherLiabilitiesMemberus-gaap:CashFlowHedgingMember2022-05-310001467373us-gaap:OtherLiabilitiesMemberus-gaap:CashFlowHedgingMember2021-08-310001467373us-gaap:OtherCurrentLiabilitiesMemberacn:OtherDerivativeInstrumentsMember2022-05-310001467373us-gaap:OtherCurrentLiabilitiesMemberacn:OtherDerivativeInstrumentsMember2021-08-310001467373acn:DuckCreekEquityMethodInvestmentMember2020-09-012021-05-31acn:reportableSegment0001467373srt:NorthAmericaMember2022-03-012022-05-310001467373srt:NorthAmericaMember2021-03-012021-05-310001467373srt:NorthAmericaMember2021-09-012022-05-310001467373srt:NorthAmericaMember2020-09-012021-05-310001467373srt:EuropeMember2022-03-012022-05-310001467373srt:EuropeMember2021-03-012021-05-310001467373srt:EuropeMember2021-09-012022-05-310001467373srt:EuropeMember2020-09-012021-05-310001467373acn:GrowthMarketsMember2022-03-012022-05-310001467373acn:GrowthMarketsMember2021-03-012021-05-310001467373acn:GrowthMarketsMember2021-09-012022-05-310001467373acn:GrowthMarketsMember2020-09-012021-05-310001467373acn:CommunicationsMediaandTechnologyMember2022-03-012022-05-310001467373acn:CommunicationsMediaandTechnologyMember2021-03-012021-05-310001467373acn:CommunicationsMediaandTechnologyMember2021-09-012022-05-310001467373acn:CommunicationsMediaandTechnologyMember2020-09-012021-05-310001467373acn:FinancialServicesSegmentMember2022-03-012022-05-310001467373acn:FinancialServicesSegmentMember2021-03-012021-05-310001467373acn:FinancialServicesSegmentMember2021-09-012022-05-310001467373acn:FinancialServicesSegmentMember2020-09-012021-05-310001467373acn:HealthAndPublicServiceSegmentMember2022-03-012022-05-310001467373acn:HealthAndPublicServiceSegmentMember2021-03-012021-05-310001467373acn:HealthAndPublicServiceSegmentMember2021-09-012022-05-310001467373acn:HealthAndPublicServiceSegmentMember2020-09-012021-05-310001467373acn:ProductsSegmentMember2022-03-012022-05-310001467373acn:ProductsSegmentMember2021-03-012021-05-310001467373acn:ProductsSegmentMember2021-09-012022-05-310001467373acn:ProductsSegmentMember2020-09-012021-05-310001467373acn:ResourcesSegmentMember2022-03-012022-05-310001467373acn:ResourcesSegmentMember2021-03-012021-05-310001467373acn:ResourcesSegmentMember2021-09-012022-05-310001467373acn:ResourcesSegmentMember2020-09-012021-05-310001467373acn:ConsultingRevenueMember2022-03-012022-05-310001467373acn:ConsultingRevenueMember2021-03-012021-05-310001467373acn:ConsultingRevenueMember2021-09-012022-05-310001467373acn:ConsultingRevenueMember2020-09-012021-05-310001467373acn:OutsourcingRevenueMember2022-03-012022-05-310001467373acn:OutsourcingRevenueMember2021-03-012021-05-310001467373acn:OutsourcingRevenueMember2021-09-012022-05-310001467373acn:OutsourcingRevenueMember2020-09-012021-05-310001467373srt:ScenarioPreviouslyReportedMembersrt:NorthAmericaMember2021-08-310001467373srt:ScenarioPreviouslyReportedMembersrt:EuropeMember2021-08-310001467373srt:ScenarioPreviouslyReportedMemberacn:GrowthMarketsMember2021-08-310001467373srt:ScenarioPreviouslyReportedMember2021-08-310001467373srt:RestatementAdjustmentMembersrt:NorthAmericaMember2021-08-310001467373srt:RestatementAdjustmentMembersrt:EuropeMember2021-08-310001467373srt:RestatementAdjustmentMemberacn:GrowthMarketsMember2021-08-310001467373srt:RestatementAdjustmentMember2021-08-310001467373srt:NorthAmericaMember2021-08-310001467373srt:EuropeMember2021-08-310001467373acn:GrowthMarketsMember2021-08-31
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | | | | |
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended May 31, 2022
OR
| | | | | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
Commission File Number: 001-34448
Accenture plc
(Exact name of registrant as specified in its charter)
| | | | | |
Ireland | 98-0627530 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
1 Grand Canal Square,
Grand Canal Harbour,
Dublin 2, Ireland
(Address of principal executive offices)
(353) (1) 646-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Class A ordinary shares, par value $0.0000225 per share | ACN | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | |
Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ |
Smaller reporting company | ☐ | Emerging growth company | ☐ | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of shares of the registrant’s Class A ordinary shares, par value $0.0000225 per share, outstanding as of June 9, 2022 was 664,188,290 (which number includes 31,640,581 issued shares held by the registrant). The number of shares of the registrant’s Class X ordinary shares, par value $0.0000225 per share, outstanding as of June 9, 2022 was 503,837.
Table of Contents
| | | | | | | | |
| | |
| | Page |
Part I. | | |
Item 1. | | |
| | |
| | |
| | |
| | |
| | |
| | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
Part II. | | |
Item 1. | | |
Item 1A. | | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
Item 5. | | |
Item 6. | | |
| |
| | | | | | | | | | | |
| | Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts) | |
ACCENTURE FORM 10-Q | | 3 |
Part I — Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
May 31, 2022 and August 31, 2021
| | | | | | | | | | | |
| May 31, 2022 | | August 31, 2021 |
ASSETS | (Unaudited) | | |
CURRENT ASSETS: | | | |
Cash and cash equivalents | $ | 6,703,568 | | | $ | 8,168,174 | |
Short-term investments | 4,322 | | | 4,294 | |
Receivables and contract assets | 12,219,074 | | | 9,728,212 | |
Other current assets | 2,080,776 | | | 1,765,831 | |
Total current assets | 21,007,740 | | | 19,666,511 | |
NON-CURRENT ASSETS: | | | |
Contract assets | 35,714 | | | 38,334 | |
Investments | 331,503 | | | 329,526 | |
Property and equipment, net | 1,665,478 | | | 1,639,105 | |
Lease assets | 3,178,636 | | | 3,182,519 | |
Goodwill | 12,499,443 | | | 11,125,861 | |
Deferred contract costs | 826,042 | | | 731,445 | |
Deferred tax assets | 4,013,089 | | | 4,007,130 | |
Other non-current assets | 2,537,553 | | | 2,455,412 | |
Total non-current assets | 25,087,458 | | | 23,509,332 | |
TOTAL ASSETS | $ | 46,095,198 | | | $ | 43,175,843 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | |
CURRENT LIABILITIES: | | | |
Current portion of long-term debt and bank borrowings | $ | 8,768 | | | $ | 12,080 | |
Accounts payable | 2,384,352 | | | 2,274,057 | |
Deferred revenues | 4,561,147 | | | 4,229,177 | |
Accrued payroll and related benefits | 7,047,124 | | | 6,747,853 | |
Income taxes payable | 615,959 | | | 423,400 | |
Lease liabilities | 733,805 | | | 744,164 | |
Accrued consumption taxes | 640,252 | | | 609,553 | |
Other accrued liabilities | 571,185 | | | 668,583 | |
Total current liabilities | 16,562,592 | | | 15,708,867 | |
NON-CURRENT LIABILITIES: | | | |
Long-term debt | 51,546 | | | 53,473 | |
Deferred revenues | 733,982 | | | 700,080 | |
Retirement obligation | 2,026,018 | | | 2,016,021 | |
Deferred tax liabilities | 364,951 | | | 243,636 | |
Income taxes payable | 1,197,105 | | | 1,105,896 | |
Lease liabilities | 2,694,489 | | | 2,696,917 | |
Other non-current liabilities | 452,792 | | | 553,839 | |
Total non-current liabilities | 7,520,883 | | | 7,369,862 | |
COMMITMENTS AND CONTINGENCIES | | | |
SHAREHOLDERS’ EQUITY: | | | |
Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of May 31, 2022 and August 31, 2021 | 57 | | | 57 | |
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 663,985,273 and 656,590,625 shares issued as of May 31, 2022 and August 31, 2021, respectively | 15 | | | 15 | |
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 503,837 and 512,655 shares issued and outstanding as of May 31, 2022 and August 31, 2021, respectively | — | | | — | |
Restricted share units | 1,753,930 | | | 1,750,784 | |
Additional paid-in capital | 10,534,282 | | | 8,617,838 | |
Treasury shares, at cost: Ordinary, 40,000 shares as of May 31, 2022 and August 31, 2021; Class A ordinary, 31,527,538 and 24,504,666 shares as of May 31, 2022 and August 31, 2021, respectively | (6,122,402) | | | (3,408,491) | |
Retained earnings | 17,177,358 | | | 13,988,748 | |
Accumulated other comprehensive loss | (1,954,146) | | | (1,419,497) | |
Total Accenture plc shareholders’ equity | 21,389,094 | | | 19,529,454 | |
Noncontrolling interests | 622,629 | | | 567,660 | |
Total shareholders’ equity | 22,011,723 | | | 20,097,114 | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 46,095,198 | | | $ | 43,175,843 | |
The accompanying Notes are an integral part of these Consolidated Financial Statements.
| | | | | | | | | | | |
| | Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts) | |
ACCENTURE FORM 10-Q | | 4 |
Consolidated Income Statements
For the Three and Nine Months Ended May 31, 2022 and 2021
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| May 31, 2022 | | May 31, 2021 | | May 31, 2022 | | May 31, 2021 |
REVENUES: | | | | | | | |
Revenues | $ | 16,158,803 | | | $ | 13,263,795 | | | $ | 46,170,649 | | | $ | 37,114,105 | |
OPERATING EXPENSES: | | | | | | | |
Cost of services | 10,844,069 | | | 8,859,411 | | | 31,415,167 | | | 25,216,193 | |
Sales and marketing | 1,660,919 | | | 1,406,606 | | | 4,530,158 | | | 3,773,268 | |
General and administrative costs | 1,050,697 | | | 879,122 | | | 3,126,332 | | | 2,461,804 | |
Total operating expenses | 13,555,685 | | | 11,145,139 | | | 39,071,657 | | | 31,451,265 | |
OPERATING INCOME | 2,603,118 | | | 2,118,656 | | | 7,098,992 | | | 5,662,840 | |
Interest income | 8,727 | | | 4,551 | | | 22,046 | | | 23,643 | |
Interest expense | (12,050) | | | (28,739) | | | (34,449) | | | (46,515) | |
Other income (expense), net | (8,877) | | | (467) | | | (39,089) | | | 203,343 | |
Loss on disposition of Russia business | (96,294) | | | — | | | (96,294) | | | — | |
INCOME BEFORE INCOME TAXES | 2,494,624 | | | 2,094,001 | | | 6,951,206 | | | 5,843,311 | |
Income tax expense | 675,308 | | | 524,429 | | | 1,654,631 | | | 1,290,189 | |
NET INCOME | 1,819,316 | | | 1,569,572 | | | 5,296,575 | | | 4,553,122 | |
Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc. | (1,902) | | | (1,699) | | | (5,578) | | | (5,001) | |
Net income attributable to noncontrolling interests – other | (31,339) | | | (18,447) | | | (78,956) | | | (57,560) | |
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC | $ | 1,786,075 | | | $ | 1,549,426 | | | $ | 5,212,041 | | | $ | 4,490,561 | |
Weighted average Class A ordinary shares: | | | | | | | |
Basic | 632,749,442 | | | 635,203,753 | | | 632,969,487 | | | 635,151,632 | |
Diluted | 641,004,741 | | | 645,454,021 | | | 643,692,440 | | | 646,244,001 | |
Earnings per Class A ordinary share: | | | | | | | |
Basic | $ | 2.82 | | | $ | 2.44 | | | $ | 8.23 | | | $ | 7.07 | |
Diluted | $ | 2.79 | | | $ | 2.40 | | | $ | 8.11 | | | $ | 6.96 | |
Cash dividends per share | $ | 0.97 | | | $ | 0.88 | | | $ | 2.91 | | | $ | 2.64 | |
The accompanying Notes are an integral part of these Consolidated Financial Statements.
| | | | | | | | | | | |
| | Consolidated Financial Statements (In thousands of U.S. dollars) | |
ACCENTURE FORM 10-Q | | 5 |
| | | |
Consolidated Statements of Comprehensive Income
For the Three and Nine Months Ended May 31, 2022 and 2021
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| May 31, 2022 | | May 31, 2021 | | May 31, 2022 | | May 31, 2021 |
NET INCOME | $ | 1,819,316 | | | $ | 1,569,572 | | | $ | 5,296,575 | | | $ | 4,553,122 | |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | | | | | | | |
Foreign currency translation | (231,311) | | | 68,079 | | | (442,664) | | | 234,390 | |
Defined benefit plans | 10,292 | | | 11,048 | | | 6,865 | | | 32,184 | |
Cash flow hedges | (57,642) | | | 70,554 | | | (98,850) | | | 34,457 | |
Investments | — | | | — | | | — | | | 49 | |
OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC | (278,661) | | | 149,681 | | | (534,649) | | | 301,080 | |
Other comprehensive income (loss) attributable to noncontrolling interests | (4,456) | | | 3,993 | | | (10,032) | | | 5,965 | |
COMPREHENSIVE INCOME | $ | 1,536,199 | | | $ | 1,723,246 | | | $ | 4,751,894 | | | $ | 4,860,167 | |
| | | | | | | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC | $ | 1,507,414 | | | $ | 1,699,107 | | | $ | 4,677,392 | | | $ | 4,791,641 | |
Comprehensive income attributable to noncontrolling interests | 28,785 | | | 24,139 | | | 74,502 | | | 68,526 | |
COMPREHENSIVE INCOME | $ | 1,536,199 | | | $ | 1,723,246 | | | $ | 4,751,894 | | | $ | 4,860,167 | |
The accompanying Notes are an integral part of these Consolidated Financial Statements.
| | | | | | | | | | | |
| | Consolidated Financial Statements (In thousands of U.S. dollars and share amounts) | |
ACCENTURE FORM 10-Q | | 6 |
| | | |
Consolidated Shareholders’ Equity Statement
For the Three Months Ended May 31, 2022
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ordinary Shares | | Class A Ordinary Shares | | Class X Ordinary Shares | | Restricted Share Units | | Additional Paid-in Capital | | Treasury Shares | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Total Accenture plc Shareholders’ Equity | | Noncontrolling Interests | | Total Shareholders’ Equity |
| $ | | No. Shares | | $ | | No. Shares | | $ | | No. Shares | | | | $ | | No. Shares | | | | | |
Balance as of February 28, 2022 | $ | 57 | | | 40 | | | $ | 15 | | | 662,417 | | | $ | — | | | 504 | | | $ | 1,438,596 | | | $ | 10,065,790 | | | $ | (5,297,349) | | | (29,035) | | | $ | 16,028,399 | | | $ | (1,675,485) | | | $ | 20,560,023 | | | $ | 596,956 | | | $ | 21,156,979 | |
Net income | | | | | | | | | | | | | | | | | | | | | 1,786,075 | | | | | 1,786,075 | | | 33,241 | | | 1,819,316 | |
Other comprehensive income (loss) | | | | | | | | | | | | | | | | | | | | | | | (278,661) | | | (278,661) | | | (4,456) | | | (283,117) | |
Purchases of Class A shares | | | | | | | | | | | | | | | 925 | | | (972,171) | | | (3,102) | | | | | | | (971,246) | | | (925) | | | (972,171) | |
Share-based compensation expense | | | | | | | | | | | | | 346,666 | | | 60,591 | | | | | | | | | | | 407,257 | | | | | 407,257 | |
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | — | |
Issuances of Class A shares for employee share programs | | | | | | | 1,568 | | | | | | | (55,313) | | | 405,704 | | | 147,118 | | | 569 | | | | | | | 497,509 | | | 465 | | | 497,974 | |
Dividends | | | | | | | | | | | | | 23,981 | | | | | | | | | (637,116) | | | | | (613,135) | | | (650) | | | (613,785) | |
Other, net | | | | | | | | | | | | | | | 1,272 | | | | | | | | | | | 1,272 | | | (2,002) | | | (730) | |
Balance as of May 31, 2022 | $ | 57 | | | 40 | | | $ | 15 | | | 663,985 | | | $ | — | | | 504 | | | $ | 1,753,930 | | | $ | 10,534,282 | | | $ | (6,122,402) | | | (31,568) | | | $ | 17,177,358 | | | $ | (1,954,146) | | | $ | 21,389,094 | | | $ | 622,629 | | | $ | 22,011,723 | |
The accompanying Notes are an integral part of these Consolidated Financial Statements.
| | | | | | | | | | | |
| | Consolidated Financial Statements (In thousands of U.S. dollars and share amounts) | |
ACCENTURE FORM 10-Q | | 7 |
| | | |
Consolidated Shareholders’ Equity Statement — (continued)
For the Three Months Ended May 31, 2021
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ordinary Shares | | Class A Ordinary Shares | | Class X Ordinary Shares | | Restricted Share Units | | Additional Paid-in Capital | | Treasury Shares | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Total Accenture plc Shareholders’ Equity | | Noncontrolling Interests | | Total Shareholders’ Equity |
| $ | | No. Shares | | $ | | No. Shares | | $ | | No. Shares | | | | $ | | No. Shares | | | | | |
Balance as of February 28, 2021 | $ | 57 | | | 40 | | | $ | 15 | | | 665,115 | | | $ | — | | | 521 | | | $ | 1,207,161 | | | $ | 8,389,344 | | | $ | (3,913,917) | | | (29,508) | | | $ | 14,035,805 | | | $ | (1,410,438) | | | $ | 18,308,027 | | | $ | 534,400 | | | $ | 18,842,427 | |
Net income | | | | | | | | | | | | | | | | | | | | | 1,549,426 | | | | | 1,549,426 | | | 20,146 | | | 1,569,572 | |
Other comprehensive income (loss) | | | | | | | | | | | | | | | | | | | | | | | 149,681 | | | 149,681 | | | 3,993 | | | 153,674 | |
Purchases of Class A shares | | | | | | | | | | | | | | | 811 | | | (832,456) | | | (3,006) | | | | | | | (831,645) | | | (811) | | | (832,456) | |
Share-based compensation expense | | | | | | | | | | | | | 282,861 | | | 48,177 | | | | | | | | | | | 331,038 | | | | | 331,038 | |
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares | | | | | | | | | | | (5) | | | | | (2,539) | | | | | | | | | | | (2,539) | | | | | (2,539) | |
Issuances of Class A shares for employee share programs | | | | | | | 1,279 | | | | | | | (30,160) | | | 315,312 | | | 106,950 | | | 515 | | | | | | | 392,102 | | | 376 | | | 392,478 | |
Dividends | | | | | | | | | | | | | 22,495 | | | | | | | | | (580,950) | | | | | (558,455) | | | (615) | | | (559,070) | |
Other, net | | | | | | | | | | | | | | | 5,210 | | | | | | | | | | | 5,210 | | | (6,370) | | | (1,160) | |
Balance as of May 31, 2021 | $ | 57 | | | 40 | | | $ | 15 | | | 666,394 | | | $ | — | | | 516 | | | $ | 1,482,357 | | | $ | 8,756,315 | | | $ | (4,639,423) | | | (31,999) | | | $ | 15,004,281 | | | $ | (1,260,757) | | | $ | 19,342,845 | | | $ | 551,119 | | | $ | 19,893,964 | |
The accompanying Notes are an integral part of these Consolidated Financial Statements.
| | | | | | | | | | | |
| | Consolidated Financial Statements (In thousands of U.S. dollars and share amounts) | |
ACCENTURE FORM 10-Q | | 8 |
| | | |
Consolidated Shareholders’ Equity Statement — (continued)
For the Nine Months Ended May 31, 2022
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ordinary Shares | | Class A Ordinary Shares | | Class X Ordinary Shares | | Restricted Share Units | | Additional Paid-in Capital | | Treasury Shares | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Total Accenture plc Shareholders’ Equity | | Noncontrolling Interests | | Total Shareholders’ Equity |
| $ | | No. Shares | | $ | | No. Shares | | $ | | No. Shares | | | | $ | | No. Shares | | | | | |
Balance as of August 31, 2021 | $ | 57 | | | 40 | | | $ | 15 | | | 656,591 | | | $ | — | | | 513 | | | $ | 1,750,784 | | | $ | 8,617,838 | | | $ | (3,408,491) | | | (24,545) | | | $ | 13,988,748 | | | $ | (1,419,497) | | | $ | 19,529,454 | | | $ | 567,660 | | | $ | 20,097,114 | |
Net income | | | | | | | | | | | | | | | | | | | | | 5,212,041 | | | | | 5,212,041 | | | 84,534 | | | 5,296,575 | |
Other comprehensive income (loss) | | | | | | | | | | | | | | | | | | | | | | | (534,649) | | | (534,649) | | | (10,032) | | | (544,681) | |
Purchases of Class A shares | | | | | | | | | | | | | | | 3,388 | | | (3,506,617) | | | (10,119) | | | | | | | (3,503,229) | | | (3,388) | | | (3,506,617) | |
Share-based compensation expense | | | | | | | | | | | | | 1,210,825 | | | 108,730 | | | | | | | | | | | 1,319,555 | | | | | 1,319,555 | |
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares | | | | | | | | | | | (9) | | | | | (4,274) | | | | | | | | | | | (4,274) | | | | | (4,274) | |
Issuances of Class A shares for employee share programs | | | | | | | 7,394 | | | | | | | (1,285,617) | | | 1,795,507 | | | 792,706 | | | 3,096 | | | (103,889) | | | | | 1,198,707 | | | 1,144 | | | 1,199,851 | |
Dividends | | | | | | | | | | | | | 77,938 | | | | | | | | | (1,919,542) | | | | | (1,841,604) | | | (1,972) | | | (1,843,576) | |
Other, net | | | | | | | | | | | | | | | 13,093 | | | | | | | | | | | 13,093 | | | (15,317) | | | (2,224) | |
Balance as of May 31, 2022 | $ | 57 | | | 40 | | | $ | 15 | | | 663,985 | | | $ | — | | | 504 | | | $ | 1,753,930 | | | $ | 10,534,282 | | | $ | (6,122,402) | | | (31,568) | | | $ | 17,177,358 | | | $ | (1,954,146) | | | $ | 21,389,094 | | | $ | 622,629 | | | $ | 22,011,723 | |
The accompanying Notes are an integral part of these Consolidated Financial Statements.
| | | | | | | | | | | |
| | Consolidated Financial Statements (In thousands of U.S. dollars and share amounts) | |
ACCENTURE FORM 10-Q | | 9 |
| | | |
Consolidated Shareholders’ Equity Statement — (continued)
For the Nine Months Ended May 31, 2021
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ordinary Shares | | Class A Ordinary Shares | | Class X Ordinary Shares | | Restricted Share Units | | Additional Paid-in Capital | | Treasury Shares | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Total Accenture plc Shareholders’ Equity | | Noncontrolling Interests | | Total Shareholders’ Equity |
| $ | | No. Shares | | $ | | No. Shares | | $ | | No. Shares | | | | $ | | No. Shares | | | | | |
Balance as of August 31, 2020 | $ | 57 | | | 40 | | | $ | 15 | | | 658,549 | | | $ | — | | | 528 | | | $ | 1,585,302 | | | $ | 7,167,227 | | | $ | (2,565,761) | | | (24,423) | | | $ | 12,375,533 | | | $ | (1,561,837) | | | $ | 17,000,536 | | | $ | 498,637 | | | $ | 17,499,173 | |
Net income | | | | | | | | | | | | | | | | | | | | | 4,490,561 | | | | | 4,490,561 | | | 62,561 | | | 4,553,122 | |
Other comprehensive income (loss) | | | | | | | | | | | | | | | | | | | | | | | 301,080 | | | 301,080 | | | 5,965 | | | 307,045 | |
Purchases of Class A shares | | | | | | | | | | | | | | | 2,732 | | | (2,780,928) | | | (10,970) | | | | | | | (2,778,196) | | | (2,732) | | | (2,780,928) | |
Share-based compensation expense | | | | | | | | | | | | | 977,979 | | | 89,272 | | | | | | | | | | | 1,067,251 | | | | | 1,067,251 | |
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares | | | | | | | | | | | (12) | | | | | (7,548) | | | | | | | | | | | (7,548) | | | | | (7,548) | |
Issuances of Class A shares for employee share programs | | | | | | | 7,845 | | | | | | | (1,145,096) | | | 1,497,827 | | | 707,266 | | | 3,394 | | | (121,342) | | | | | 938,655 | | | 909 | | | 939,564 | |
Dividends | | | | | | | | | | | | | 64,172 | | | | | | | | | (1,740,471) | | | | | (1,676,299) | | | (1,865) | | | (1,678,164) | |
Other, net | | | | | | | | | | | | | | | 6,805 | | | | | | | | | | | 6,805 | | | (12,356) | | | (5,551) | |
Balance as of May 31, 2021 | $ | 57 | | | 40 | | | $ | 15 | | | 666,394 | | | $ | — | | | 516 | | | $ | 1,482,357 | | | $ | 8,756,315 | | | $ | (4,639,423) | | | (31,999) | | | $ | 15,004,281 | | | $ | (1,260,757) | | | $ | 19,342,845 | | | $ | 551,119 | | | $ | 19,893,964 | |
The accompanying Notes are an integral part of these Consolidated Financial Statements.
| | | | | | | | | | | |
| | Consolidated Financial Statements (In thousands of U.S. dollars) | |
ACCENTURE FORM 10-Q | | 10 |
| | | |
Consolidated Cash Flows Statements
For the Nine Months Ended May 31, 2022 and 2021
(Unaudited)
| | | | | | | | | | | |
| May 31, 2022 | | May 31, 2021 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | |
Net income | $ | 5,296,575 | | | $ | 4,553,122 | |
Adjustments to reconcile Net income to Net cash provided by (used in) operating activities — | | | |
Depreciation, amortization and other | 1,553,311 | | | 1,404,961 | |
Share-based compensation expense | 1,319,555 | | | 1,067,251 | |
| | | |
| | | |
Deferred tax expense (benefit) | (27,784) | | | (59,713) | |
Other, net | (99,979) | | | (291,096) | |
Change in assets and liabilities, net of acquisitions — | | | |
Receivables and contract assets, current and non-current | (2,594,564) | | | (1,311,984) | |
Other current and non-current assets | (713,632) | | | (369,888) | |
Accounts payable | 142,286 | | | 522,087 | |
Deferred revenues, current and non-current | 585,497 | | | 477,116 | |
Accrued payroll and related benefits | 489,743 | | | 915,407 | |
Income taxes payable, current and non-current | 360,262 | | | 192,362 | |
Other current and non-current liabilities | (560,251) | | | (560,909) | |
Net cash provided by (used in) operating activities | 5,751,019 | | | 6,538,716 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | |
| | | |
| | | |
Purchases of property and equipment | (540,947) | | | (343,837) | |
Purchases of businesses and investments, net of cash acquired | (2,212,388) | | | (1,544,412) | |
Proceeds from the sale of businesses and investments, net of cash transferred | (108,099) | | | 409,828 | |
| | | |
Other investing, net | 9,397 | | | 19,971 | |
Net cash provided by (used in) investing activities | (2,852,037) | | | (1,458,450) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | |
Proceeds from issuance of shares | 1,199,851 | | | 939,564 | |
Purchases of shares | (3,510,891) | | | (2,788,476) | |
Proceeds from (repayments of) long-term debt, net | (11,530) | | | (1,286) | |
Cash dividends paid | (1,843,576) | | | (1,678,164) | |
Other financing, net | (43,468) | | | (30,190) | |
Net cash provided by (used in) financing activities | (4,209,614) | | | (3,558,552) | |
Effect of exchange rate changes on cash and cash equivalents | (153,974) | | | 72,336 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1,464,606) | | | 1,594,050 | |
CASH AND CASH EQUIVALENTS, beginning of period | 8,168,174 | | | 8,415,330 | |
CASH AND CASH EQUIVALENTS, end of period | $ | 6,703,568 | | | $ | 10,009,380 | |
SUPPLEMENTAL CASH FLOW INFORMATION: | | | |
Income taxes paid, net | $ | 1,264,631 | | | $ | 1,090,696 | |
The accompanying Notes are an integral part of these Consolidated Financial Statements.
| | | | | | | | | | | |
| | Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) | |
ACCENTURE FORM 10-Q | | 11 |
| | | |
1. Basis of Presentation
The accompanying unaudited interim Consolidated Financial Statements of Accenture plc and its controlled subsidiary companies have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. We use the terms “Accenture,” “we” and “our” in the Notes to Consolidated Financial Statements to refer to Accenture plc and its subsidiaries. These Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2021 included in our Annual Report on Form 10-K filed with the SEC on October 15, 2021.
The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from those estimates. The Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair presentation of results for these interim periods. The results of operations for the three and nine months ended May 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2022.
Allowance for Credit Losses - Client Receivables and Contract Assets
As of May 31, 2022 and August 31, 2021, the total allowance for credit losses recorded for client receivables and contract assets was $25,895 and $32,206, respectively. The change in the allowance is primarily due to immaterial write-offs and changes in gross client receivables and contract assets.
Investments
All available-for-sale securities and liquid investments with an original maturity greater than three months but less than one year are considered to be Short-term investments. Non-current investments consist of equity securities in publicly-traded and privately-held companies and are accounted for using either the equity or fair value measurement alternative method of accounting (for investments without readily determinable fair values).
Our non-current investments are as follows:
| | | | | | | | | | | |
| May 31, 2022 | | August 31, 2021 |
Equity method investments | $ | 172,512 | | | $ | 184,157 | |
Investments without readily determinable fair values | 158,991 | | | 145,369 | |
Total non-current investments | $ | 331,503 | | | $ | 329,526 | |
For investments in which we can exercise significant influence but do not control, we use the equity method of accounting. Equity method investments are initially recorded at cost and our proportionate share of gains and losses of the investee are included as a component of Other income (expense), net. Our equity method investments consist primarily of an investment in Duck Creek Technologies. As of May 31, 2022, the carrying amount of our investment was $148,140, and the estimated fair value of our approximately 16% ownership was $340,426. We account for the investment under the equity method because we have the ability to influence operations through the combination of our voting power and through other factors, such as representation on the board and our business relationship.
| | | | | | | | | | | |
| | Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) | |
ACCENTURE FORM 10-Q | | 12 |
| | | |
Depreciation and Amortization
As of May 31, 2022 and August 31, 2021, total accumulated depreciation was $2,625,468 and $2,412,449, respectively. See table below for summary of depreciation on fixed assets, deferred transition amortization, intangible assets amortization and operating lease cost for the three and nine months ended May 31, 2022, respectively.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| May 31, 2022 | | May 31, 2021 (1) | | May 31, 2022 | | May 31, 2021 (1) |
Depreciation | $ | 150,272 | | | $ | 124,502 | | | $ | 438,937 | | | $ | 377,910 | |
Amortization - Deferred transition | 68,420 | | | 65,417 | | | 203,957 | | | 228,390 | |
Amortization - Intangible assets | 109,855 | | | 93,980 | | | 328,228 | | | 234,933 | |
Operating lease cost | 193,209 | | | 193,763 | | | 576,320 | | | 559,712 | |
Other | 2,430 | | | 1,324 | | | 5,869 | | | 4,016 | |
Total depreciation, amortization and other | $ | 524,186 | | | $ | 478,986 | | | $ | 1,553,311 | | | $ | 1,404,961 | |
(1)Prior period amounts have been reclassified to conform with the current period presentation.
Recently Adopted Accounting Pronouncements
Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2021-08 ("Topic 805")
On September 1, 2021, we early adopted FASB ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606) rather than adjust them to fair value at the acquisition date. The adoption did not have a material impact on our Consolidated Financial Statements.
| | | | | | | | | | | |
| | Notes To Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) | |
ACCENTURE FORM 10-Q | | 13 |
| | | |
2. Revenues
Disaggregation of Revenue
See Note 11 (Segment Reporting) to these Consolidated Financial Statements for our disaggregated revenues.
Remaining Performance Obligations
We had remaining performance obligations of approximately $24 billion and $23 billion as of May 31, 2022 and August 31, 2021, respectively. Our remaining performance obligations represent the amount of transaction price for which work has not been performed and revenue has not been recognized. The majority of our contracts are terminable by the client on short notice with little or no termination penalties, and some without notice. Under Topic 606, only the non-cancelable portion of these contracts is included in our performance obligations. Additionally, our performance obligations only include variable consideration if we assess it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. Based on the terms of our contracts, a significant portion of what we consider contract bookings is not included in our remaining performance obligations. We expect to recognize approximately 40% of our remaining performance obligations as of May 31, 2022 as revenue in fiscal 2022, an additional 36% in fiscal 2023, and the balance thereafter.
Contract Estimates
Adjustments in contract estimates related to performance obligations satisfied or partially satisfied in prior periods were immaterial for the three and nine months ended May 31, 2022 and 2021, respectively.
Contract Balances
Deferred transition revenues were $733,982 and $700,080 as of May 31, 2022 and August 31, 2021, respectively, and are included in Non-current deferred revenues. Costs related to these activities are also deferred and are expensed as the services are provided. Deferred transition costs were $826,042 and $731,445 as of May 31, 2022 and August 31, 2021, respectively, and are included in Deferred contract costs. Generally, deferred amounts are protected in the event of early termination of the contract and are monitored regularly for impairment. Impairment losses are recorded when projected remaining undiscounted operating cash flows of the related contract are not sufficient to recover the carrying amount of contract assets.
The following table provides information about the balances of our Receivables and Contract assets, net of allowance, and Contract liabilities (Deferred revenues):