PROPERTY, BUILDINGS AND EQUIPMENT

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property, buildings and equipment consisted of the following (in millions of dollars):


	As of
	June 30, 2020		December 31, 2019
Land	$	329	$	332
Building, structures and improvements	1,317		1,329
Furniture, fixtures, machinery and equipment	1,824		1,832
Property, buildings and equipment	$	3,470	$	3,493
Less: Accumulated depreciation and amortization and impairment	2,105		2,093
Property, buildings and equipment, net	$	1,365	$	1,400

Grainger has historically depreciated certain property, building, and equipment using both the declining balance and sum-of-the-years’ digits methods over estimated useful lives of approximately thirty years. In accordance with its policy, the Company periodically reviews information impacting the pattern of consumption for its capital assets and useful lives to ensure that estimates of depreciation expenses are appropriate. The Company’s investment in its supply chain infrastructure and technology triggered the review of these patterns of consumption. Pursuant to the review and effective January 1, 2020, the method of estimating depreciation for these assets was changed to the straight-line method and useful lives to forty and fifty years. The Company determined that these changes in depreciation method and useful lives were considered a change in accounting estimate effected by a change in accounting principle, and as such have been accounted for on a prospective basis. Grainger believes the changes to the straight-line method and useful lives are appropriate estimations of the Company's current patterns of economic consumption of its capital assets and appropriately match current revenues and costs over updated estimates of the assets' useful lives. The effect of these changes resulted in a decrease of $7 million and $15 million to depreciation expense for the three and six months ended June 30, 2020, respectively.

During the first quarter of 2020, the Company recorded approximately $44 million of impairment charges in SG&A in connection with the impairment of Fabory’s long-lived assets, including property, buildings and equipment for approximately $24 million and right-to-use (ROU) assets for approximately $20 million (presented in Other assets) due to the factors discussed in Note 7. The Company divested Fabory during the second quarter of 2020 (see Note 1).