Microsoft Adds $3.7 Billion to FY23 Op Income With Accounting Change

The firm has extended certain useful life estimates for the second time in two years.

July 29, 2022

For the second time in two years, Microsoft (MSFT) has instantly added billions of dollars to its annual operating income with the stroke of a pen. Microsoft disclosed in its latest annual report that its servers and network equipment are lasting longer thanks to increased investments, efficiencies, and technological advances.

The assessment resulted in Microsoft increasing its useful life estimates for servers and network equipment to four to six years, from two to four years. The change slashes depreciation expense and will increase Microsoft’s FY23 operating income by $3.7 billion.

It’s the second time in two years Microsoft has extended useful life estimates.

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