Property and Equipment, Net of Accumulated Depreciation
|3 Months Ended|
Aug. 31, 2018
|Property and Equipment, Net of Accumulated Depreciation [Abstract]|
|Property and Equipment, Net of Accumulated Depreciation||
Note I: Property and Equipment, Net of Accumulated Depreciation
The components of property and equipment, at cost, consisted of the following:
(1) Software includes both purchased software and costs capitalized related to internally developed software placed in service. Capitalized costs related to internally developed software that has not yet been placed in service is included in construction in progress.
Depreciation expense was $29.4 million for the three months ended August 31, 2018, compared to $28.1 million for the three months ended August 31, 2017.
In August 2017, the Company announced its plan for a new multi-building Paychex campus based in Rochester, NY. This involved the purchase of five buildings and the renovation of over 300,000 square feet of existing space. The new campus will result in the consolidation of currently leased space in the Rochester area. The Company completed the purchase of these buildings during the three months ended November 30, 2017 for a combined cost of approximately $34.7 million and placed approximately $16.0 million in escrow for building renovations, which are in-process. As of August 31, 2018 and May 31, 2018, $33.2 million and $32.0 million is included in the Company’s construction in progress balance, respectively, with a remaining balance in escrow of $4.4 million and $14.2 million, respectively. In addition, in September 2017, the Company entered into a transaction with the County of Monroe Industrial Development Agency for purposes of obtaining public benefits and inducements, expiring on December 31, 2039. The public inducements include exemption from sales and use taxes for goods and services directly related to the renovations of the new multi-building campus as well as other property tax incentives.
The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef