10-Q 1 acn-20211130.htm 10-Q acn-20211130
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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 November 30, 2021
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
acn-20211130_g1.gif
Accenture plc
(Exact name of registrant as specified in its charter)
Ireland98-0627530
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A ordinary shares, par value $0.0000225 per shareACNNew 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 December 7, 2021 was 658,332,779 (which number includes 26,332,043 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 December 7, 2021 was 508,155.


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
November 30, 2021 and August 31, 2021
November 30, 2021August 31, 2021
ASSETS(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents$5,637,117 $8,168,174 
Short-term investments6,968 4,294 
Receivables and contract assets11,120,401 9,728,212 
Other current assets1,857,166 1,765,831 
Total current assets18,621,652 19,666,511 
NON-CURRENT ASSETS:
Contract assets41,612 38,334 
Investments325,714 329,526 
Property and equipment, net1,654,065 1,639,105 
Lease assets3,157,065 3,182,519 
Goodwill12,395,904 11,125,861 
Deferred contract costs751,939 731,445 
Deferred tax assets4,036,565 4,007,130 
Other non-current assets2,690,227 2,455,412 
Total non-current assets25,053,091 23,509,332 
TOTAL ASSETS$43,674,743 $43,175,843 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings$9,089 $12,080 
Accounts payable2,210,163 2,274,057 
Deferred revenues4,006,078 4,229,177 
Accrued payroll and related benefits6,445,109 6,747,853 
Income taxes payable547,883 423,400 
Lease liabilities738,285 744,164 
Accrued consumption taxes612,154 609,553 
Other accrued liabilities663,246 668,583 
Total current liabilities15,232,007 15,708,867 
NON-CURRENT LIABILITIES:
Long-term debt55,884 53,473 
Deferred revenues701,629 700,080 
Retirement obligation2,045,443 2,016,021 
Deferred tax liabilities320,163 243,636 
Income taxes payable1,144,011 1,105,896 
Lease liabilities2,674,020 2,696,917 
Other non-current liabilities562,928 553,839 
Total non-current liabilities7,504,078 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 November 30, 2021 and August 31, 2021
57 57 
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 658,332,779 and 656,590,625 shares issued as of November 30, 2021 and August 31, 2021, respectively
15 15 
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 508,155 and 512,655 shares issued and outstanding as of November 30, 2021 and August 31, 2021, respectively
— — 
Restricted share units1,931,366 1,750,784 
Additional paid-in capital9,097,934 8,617,838 
Treasury shares, at cost: Ordinary, 40,000 shares as of November 30, 2021 and August 31, 2021; Class A ordinary, 26,247,335 and 24,504,666 shares as of November 30, 2021 and August 31, 2021, respectively
(4,079,625)(3,408,491)
Retained earnings15,110,688 13,988,748 
Accumulated other comprehensive loss(1,707,236)(1,419,497)
Total Accenture plc shareholders’ equity20,353,199 19,529,454 
Noncontrolling interests585,459 567,660 
Total shareholders’ equity20,938,658 20,097,114 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$43,674,743 $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 Months Ended November 30, 2021 and 2020
(Unaudited)
20212020
REVENUES:
Revenues $14,965,153 $11,762,185 
OPERATING EXPENSES:
Cost of services 10,048,364 7,863,889 
Sales and marketing 1,454,425 1,227,176 
General and administrative costs 1,028,070 780,451 
Total operating expenses12,530,859 9,871,516 
OPERATING INCOME2,434,294 1,890,669 
Interest income6,050 10,685 
Interest expense(11,183)(8,854)
Other income (expense), net (23,029)94,367 
INCOME BEFORE INCOME TAXES2,406,132 1,986,867 
Income tax expense586,402 464,810 
NET INCOME1,819,730 1,522,057 
Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc.(1,934)(1,700)
Net income attributable to noncontrolling interests – other(26,772)(20,081)
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC$1,791,024 $1,500,276 
Weighted average Class A ordinary shares:
Basic632,280,932 634,271,482 
Diluted644,922,661 646,879,735 
Earnings per Class A ordinary share:
Basic$2.83 $2.37 
Diluted$2.78 $2.32 
Cash dividends per share$0.97 $0.88 
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 Months Ended November 30, 2021 and 2020
(Unaudited)
20212020
NET INCOME$1,819,730 $1,522,057 
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation(220,763)67,312 
Defined benefit plans(12,961)10,881 
Cash flow hedges(54,015)4,393 
Investments— 49 
OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC(287,739)82,635 
Other comprehensive income (loss) attributable to noncontrolling interests(5,672)1,461 
COMPREHENSIVE INCOME$1,526,319 $1,606,153 
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC$1,503,285 $1,582,911 
Comprehensive income attributable to noncontrolling interests23,034 23,242 
COMPREHENSIVE INCOME$1,526,319 $1,606,153 
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 November 30, 2021
(Unaudited)
 Ordinary
Shares		Class A
Ordinary
Shares		Class X
Ordinary
Shares		Restricted
Share
Units		Additional
Paid-in
Capital		Treasury SharesRetained
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 income1,791,024 1,791,024 28,706 1,819,730 
Other comprehensive income (loss)(287,739)(287,739)(5,672)(293,411)
Purchases of Class A shares824 (842,842)(2,435)(842,018)(824)(842,842)
Share-based compensation expense317,552 48,139 365,691 365,691 
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares(5)(2,524)(2,524)(2,524)
Issuances of Class A shares for employee share programs1,742 (163,251)430,539 171,708 693 (30,260)408,736 394 409,130 
Dividends26,281 (638,824)(612,543)(665)(613,208)
Other, net3,118 3,118 (4,140)(1,022)
Balance as of November 30, 2021$57 40 $15 658,333 $— 508 $1,931,366 $9,097,934 $(4,079,625)(26,287)$15,110,688 $(1,707,236)$20,353,199 $585,459 $20,938,658 
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 November 30, 2020
(Unaudited)
 Ordinary
Shares		Class A
Ordinary
Shares		Class X
Ordinary
Shares		Restricted
Share
Units		Additional
Paid-in
Capital		Treasury SharesRetained
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 income1,500,276 1,500,276 21,781 1,522,057 
Other comprehensive income (loss)82,635 82,635 1,461 84,096 
Purchases of Class A shares765 (768,395)(3,341)(767,630)(765)(768,395)
Share-based compensation expense270,226 41,095 311,321 311,321 
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares(1)(500)(500)(500)
Issuances of Class A shares for employee share programs1,970 (153,073)343,783 170,315 825 (22,462)338,563 328 338,891 
Dividends19,226 (576,645)(557,419)(633)(558,052)
Other, net(1,281)(1,281)(1,094)(2,375)
Balance as of November 30, 2020$57 40 $15 660,519 $— 527 $1,721,681 $7,551,089 $(3,163,841)(26,939)$13,276,702 $(1,479,202)$17,906,501 $519,715 $18,426,216 
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
8
Consolidated Cash Flows Statements
For the Three Months Ended November 30, 2021 and 2020
(Unaudited)
20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$1,819,730 $1,522,057 
Adjustments to reconcile Net income to Net cash provided by (used in) operating activities —
Depreciation, amortization and other500,865 468,200 
Share-based compensation expense365,691 311,321 
Deferred tax expense (benefit)(30,191)(19,096)
Other, net(70,482)(103,806)
Change in assets and liabilities, net of acquisitions —
Receivables and contract assets, current and non-current(1,354,195)(594,475)
Other current and non-current assets(220,522)(18,129)
Accounts payable(58,561)148,495 
Deferred revenues, current and non-current(150,685)(151,356)
Accrued payroll and related benefits(276,965)48,385 
Income taxes payable, current and non-current188,972 34,755 
Other current and non-current liabilities(182,786)(43,506)
Net cash provided by (used in) operating activities530,871 1,602,845 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment(181,671)(93,115)
Purchases of businesses and investments, net of cash acquired(1,735,028)(503,843)
Proceeds from sales of businesses and investments87 149,002 
Other investing, net4,031 1,549 
Net cash provided by (used in) investing activities(1,912,581)(446,407)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares409,130 338,891 
Purchases of shares(845,366)(768,895)
Proceeds from (repayments of) long-term debt, net(3,448)(82)
Cash dividends paid(613,208)(558,052)
Other, net(16,568)(11,313)
Net cash provided by (used in) financing activities(1,069,460)(999,451)
Effect of exchange rate changes on cash and cash equivalents(79,887)21,686 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(2,531,057)178,673 
CASH AND CASH EQUIVALENTS, beginning of period
8,168,174 8,415,330 
CASH AND CASH EQUIVALENTS, end of period
$5,637,117 $8,594,003 
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net$387,161 $344,628 
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
9
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 months ended November 30, 2021 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 November 30, 2021 and August 31, 2021, the total allowance for credit losses recorded for client receivables and contract assets was $32,521 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:
November 30, 2021August 31, 2021
Equity method investments$177,119 $184,157 
Investments without readily determinable fair values148,595 145,369 
Total non-current investments$325,714 $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 November 30, 2021, the carrying amount of our investment was $156,574, and the estimated fair value of our approximately 16% ownership was $524,113. 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)
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Depreciation and Amortization
As of November 30, 2021 and August 31, 2021, total accumulated depreciation was $2,466,716 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 months ended November 30, 2021 and 2020, respectively.
 Three Months Ended
 November 30, 2021November 30, 2020 (1)
Depreciation$138,793 $133,918 
Amortization - Deferred transition67,206 81,356 
Amortization - Intangible assets102,542 67,207 
Operating lease cost190,242 184,372 
Other2,082 1,347 
Total depreciation, amortization and other$500,865 $468,200 
(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
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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 $23 billion as of November 30, 2021 and August 31, 2021. 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 65% of our remaining performance obligations as of November 30, 2021 as revenue in fiscal 2022, an additional 19% 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 months ended November 30, 2021 and 2020, respectively.
Contract Balances
Deferred transition revenues were $701,629 and $700,080 as of November 30, 2021 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 $751,939 and $731,445 as of November 30, 2021 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):
As of November 30, 2021As of August 31, 2021
Receivables$10,032,721 $8,796,992 
Contract assets (current)1,087,680 931,220 
Receivables and contract assets, net of allowance (current)11,120,401 9,728,212 
Contract assets (non-current)41,612 38,334 
Deferred revenues (current)4,006,078 4,229,177 
Deferred revenues (non-current)701,629 700,080 
Changes in the contract asset and liability balances during the three months ended November 30, 2021, were a result of normal business activity and not materially impacted by any other factors.
Revenues recognized during the three months ended November 30, 2021 that were included in Deferred revenues as of August 31, 2021 were $2.5 billion. Revenues recognized during the three months ended November 30, 2020 that were included in Deferred revenues as of August 31, 2020 were $2.0 billion.

Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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3. Earnings Per Share
Basic and diluted earnings per share are calculated as follows:
 Three Months Ended
 November 30, 2021November 30, 2020
Basic earnings per share
Net income attributable to Accenture plc$1,791,024 $1,500,276 
Basic weighted average Class A ordinary shares632,280,932 634,271,482 
Basic earnings per share$2.83 $2.37 
Diluted earnings per share
Net income attributable to Accenture plc$1,791,024 $1,500,276 
Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc. (1)1,934 1,700 
Net income for diluted earnings per share calculation$1,792,958 $1,501,976 
Basic weighted average Class A ordinary shares632,280,932 634,271,482 
Class A ordinary shares issuable upon redemption/exchange of noncontrolling interests (1)682,916 718,767 
Diluted effect of employee compensation related to Class A ordinary shares11,727,163 11,633,343 
Diluted effect of share purchase plans related to Class A ordinary shares231,650 256,143 
Diluted weighted average Class A ordinary shares644,922,661 646,879,735 
Diluted earnings per share$2.78 $2.32 
(1)Diluted earnings per share assumes the exchange of all Accenture Canada Holdings Inc. exchangeable shares for Accenture plc Class A ordinary shares on a one-for-one basis. The income effect does not take into account “Net income attributable to noncontrolling interests - other,” since those shares are not redeemable or exchangeable for Accenture plc Class A ordinary shares.



Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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4. Accumulated Other Comprehensive Loss
The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive loss attributable to Accenture plc:
Three Months Ended
November 30, 2021November 30, 2020
Foreign currency translation
    Beginning balance$(975,064)$(1,010,279)
             Foreign currency translation(227,093)67,443 
             Income tax benefit (expense) 730 1,313 
             Portion attributable to noncontrolling interests5,600 (1,444)
             Foreign currency translation, net of tax(220,763)67,312 
    Ending balance(1,195,827)(942,967)
Defined benefit plans
    Beginning balance(559,958)(615,223)
             Reclassifications into net periodic pension and
             post-retirement expense		(17,548)13,595 
             Income tax benefit (expense)4,573 (2,702)
             Portion attributable to noncontrolling interests14 (12)
             Defined benefit plans, net of tax(12,961)10,881 
    Ending balance(572,919)(604,342)
Cash flow hedges
    Beginning balance115,525 63,714 
             Unrealized gain (loss) (33,108)25,364 
             Reclassification adjustments into Cost of services(27,734)(20,895)
             Income tax benefit (expense) 6,769 (71)
             Portion attributable to noncontrolling interests58 (5)
             Cash flow hedges, net of tax(54,015)4,393 
    Ending balance (1)61,510 68,107 
Investments
    Beginning balance— (49)
             Unrealized gain (loss)— 49 
             Investments, net of tax— 49 
    Ending balance— — 
Accumulated other comprehensive loss$(1,707,236)$(1,479,202)
(1)As of November 30, 2021, $68,742 of net unrealized gains related to derivatives designated as cash flow hedges is expected to be reclassified into Cost of services in the next twelve months.

Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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5. Business Combinations
During the three months ended November 30, 2021, we completed individually immaterial acquisitions for total consideration of $1,751,636, net of cash acquired. The pro forma effects of these acquisitions on our operations were not material.

6. Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill by reportable operating segment are as follows:
August 31,
2021		Additions/
Adjustments		Foreign
Currency
Translation		November 30,
2021
North America$6,618,198 $352,336 $(2,148)$6,968,386 
Europe3,329,746 938,313 (147,409)4,120,650 
Growth Markets1,177,917 153,567 (24,616)1,306,868 
Total$11,125,861 $1,444,216 $(174,173)$12,395,904 
Goodwill includes immaterial adjustments related to prior period acquisitions.
Intangible Assets
Our definite-lived intangible assets by major asset class are as follows:
August 31, 2021November 30, 2021
Intangible Asset ClassGross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Customer-related$2,068,156 $(654,460)$1,413,696 $2,312,672 $(671,490)$1,641,182 
Technology250,481 (54,391)196,090 265,686 (64,069)201,617 
Patents126,202 (66,650)59,552 125,629 (65,825)59,804 
Other70,407 (28,807)41,600 75,851 (33,006)42,845 
Total$2,515,246 $(804,308)$1,710,938 $2,779,838 $(834,390)$1,945,448 
Total amortization related to our intangible assets was $102,542 and $67,207 for the three months ended November 30, 2021 and 2020, respectively. Estimated future amortization related to intangible assets held as of November 30, 2021 is as follows:
Fiscal YearEstimated Amortization
Remainder of 2022$327,351 
2023331,705 
2024300,775 
2025277,514 
2026231,903 
Thereafter476,200 
Total$1,945,448 

Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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7. Shareholders’ Equity
Dividends
Our dividend activity during the three months ended November 30, 2021 is as follows:
 Dividend Per
Share		Accenture plc Class A
Ordinary Shares		Accenture Canada Holdings
Inc. Exchangeable Shares		Total Cash
Outlay
Dividend Payment DateRecord DateCash OutlayRecord DateCash Outlay
November 15, 2021$0.97 October 14, 2021$612,543 October 12, 2021$665 $613,208 
The payment of cash dividends includes the net effect of $26,281 of additional restricted stock units being issued as a part of our share plans, which resulted in 66,486 restricted share units being issued.
Subsequent Event
On December 15, 2021, the Board of Directors of Accenture plc declared a quarterly cash dividend of $0.97 per share on our Class A ordinary shares for shareholders of record at the close of business on January 13, 2022 payable on February 15, 2022.


Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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8. Financial Instruments
Derivatives
In the normal course of business, we use derivative financial instruments to manage foreign currency exchange rate risk. Our derivative financial instruments consist of deliverable and non-deliverable foreign currency forward contracts.
Cash Flow Hedges
For a cash flow hedge, the effective portion of the change in estimated fair value of a hedging instrument is recorded in Accumulated other comprehensive loss as a separate component of Shareholders’ Equity and is reclassified into Cost of services in the Consolidated Income Statements during the period in which the hedged transaction is recognized. For information related to derivatives designated as cash flow hedges that were reclassified into Cost of services during the three months ended November 30, 2021 and 2020, as well as those expected to be reclassified into Cost of services in the next 12 months, see Note 4 (Accumulated Other Comprehensive Loss) to these Consolidated Financial Statements.
Other Derivatives
Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were net losses of $23,479 and net gains of $28,324 for the three months ended November 30, 2021 and 2020, respectively. Gains and losses on these contracts are recorded in Other income (expense), net in the Consolidated Income Statements and are offset by gains and losses on the related hedged items.
Fair Value of Derivative Instruments
The notional and fair values of all derivative instruments are as follows:
November 30, 2021August 31, 2021
Assets
Cash Flow Hedges
Other current assets$76,213 $109,416 
Other non-current assets44,558 70,250 
Other Derivatives
Other current assets20,587 32,322 
Total assets$141,358 $211,988 
Liabilities
Cash Flow Hedges
Other accrued liabilities$7,471 $5,867 
Other non-current liabilities10,160 8,585 
Other Derivatives
Other accrued liabilities18,763 3,614 
Total liabilities$36,394 $18,066 
Total fair value$104,964 $193,922 
Total notional value$9,618,821 $10,045,903 
We utilize standard counterparty master agreements containing provisions for the netting of certain foreign currency transaction obligations and for the set-off of certain obligations in the event of an insolvency of one of the parties to the transaction. In the Consolidated Balance Sheets, we record derivative assets and liabilities at gross fair value. The potential effect of netting derivative assets against liabilities under the counterparty master agreements is as follows:
November 30, 2021August 31, 2021
Net derivative assets$109,900 $193,936 
Net derivative liabilities4,936 14 
Total fair value$104,964 $193,922 


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
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9. Income Taxes
We apply an estimated annual effective tax rate to our year-to-date operating results to determine the interim provision for income tax expense. In addition, we recognize taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior year as discrete items in the interim period in which the event occurs.
Our effective tax rates for the three months ended November 30, 2021 and 2020 were 24.4% and 23.4%, respectively. Absent the $119,700 gain on our investment in Duck Creek Technologies and related $22,906 in tax expense, our effective tax rate for the three months ended November 30, 2020 would have been 23.7%. The effective tax rate for the three months ended November 30, 2021 was higher primarily due to tax expense from adjustments to prior year tax liabilities, partially offset by changes in the geographic distribution of earnings and higher tax benefits from share-based payments.

10. Commitments and Contingencies
Indemnifications and Guarantees
In the normal course of business and in conjunction with certain client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients with respect to certain matters.
As of November 30, 2021 and August 31, 2021, our aggregate potential liability to our clients for expressly limited guarantees involving the performance of third parties was approximately $867,000 and $885,000, respectively, of which all but approximately $76,000 and $78,000, respectively, may be recovered from the other third parties if we are obligated to make payments to the indemnified parties as a consequence of a performance default by the other third parties. For arrangements with unspecified limitations, we cannot reasonably estimate the aggregate maximum potential liability, as it is inherently difficult to predict the maximum potential amount of such payments, due to the conditional nature and unique facts of each particular arrangement.
To date, we have not been required to make any significant payment under any of the arrangements described above. We have assessed the current status of performance/payment risk related to arrangements with limited guarantees, warranty obligations, unspecified limitations and/or indemnification provisions and believe that any potential payments would be immaterial to the Consolidated Financial Statements, as a whole.
Legal Contingencies
As of November 30, 2021, we or our present personnel had been named as a defendant in various litigation matters. We and/or our personnel also from time to time are involved in investigations by various regulatory or legal authorities concerning matters arising in the course of our business around the world. Based on the present status of these matters, management believes the range of reasonably possible losses in addition to amounts accrued, net of insurance recoveries, will not have a material effect on our results of operations or financial condition.
On July 24, 2019, Accenture was named in a putative class action lawsuit filed by consumers of Marriott International, Inc. (“Marriott”) in the U.S. District Court for the District of Maryland. The complaint alleges negligence by us, and seeks monetary damages, costs and attorneys’ fees and other related relief, relating to a data security incident involving unauthorized access to the reservations database of Starwood Worldwide Resorts, Inc. (“Starwood”), which was acquired by Marriott on September 23, 2016. Since 2009, we have provided certain IT infrastructure outsourcing services to Starwood. On October 27, 2020, the court issued an order largely denying Accenture’s motion to dismiss the claims against us. We continue to believe the lawsuit is without merit and we will vigorously defend it. At present, we do not believe any losses from this matter will have a material effect on our results of operations or financial condition.

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
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11. Segment Reporting
Our reportable segments are our three geographic markets, which are North America, Europe and Growth Markets. Information regarding reportable segments, industry groups and type of work is as follows:
Revenues
 Three Months Ended
 November 30, 2021November 30, 2020
GEOGRAPHIC MARKETS
North America$6,907,215 $5,480,963 
Europe5,100,068 3,967,408 
Growth Markets2,957,870 2,313,814 
Total Revenues$14,965,153 $11,762,185 
INDUSTRY GROUPS
Communications, Media & Technology$3,083,605 $2,333,645 
Financial Services2,917,720 2,346,291 
Health & Public Service2,730,034 2,211,889 
Products4,281,587 3,206,125 
Resources1,952,207 1,664,235 
Total Revenues$14,965,153 $11,762,185 
TYPE OF WORK
Consulting$8,392,409 $6,332,572 
Outsourcing6,572,744 5,429,613 
Total Revenues$14,965,153 $11,762,185 

Operating Income
 Three Months Ended
 November 30, 2021November 30, 2020
GEOGRAPHIC MARKETS
North America$1,244,417 $888,809 
Europe744,856 629,430 
Growth Markets445,021 372,430