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Accounting Change to Inflate Google’s 2021 Earnings by $2.1 Billion
Search giant changes useful life estimates.
March 30, 2021
Alphabet, Google’s (GOOGL) parent company, will depreciate some of its key assets slower in 2021 than in the past. In its 2020 10-K, Google revealed it is changing its accounting estimate for the useful lives of its servers and network equipment:
1) The estimated useful life of its servers will increase to four years from three
2) The estimated useful life of certain network equipment to five years from three
The change will add approximately $2.1 billion to Alphabet’s operating earnings for 2021, or $3.07 per diluted share though the impact may vary as the company adjusts its CapEx throughout the year.
Related: MSFT, AMZN, AAPL
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