PROPERTY AND EQUIPMENT

Property and equipment, at cost, consisted of the following (in millions):



	December 31,
	2016		2017
Gross property and equipment (1):
Land and buildings	$	13,998	$	23,718
Equipment and internal-use software (2)	25,989		38,387
Other corporate assets	649		2,390
Construction in progress	1,805		4,078
Gross property and equipment	42,441		68,573
Total accumulated depreciation (1)	13,327		19,707
Total property and equipment, net	$	29,114	$	48,866

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(1)	Excludes the original cost and accumulated depreciation of fully-depreciated assets.


(2)	Includes internal-use software of $1.4 billion and $1.1 billion as of December 31, 2016 and 2017.

Depreciation expense on property and equipment was $4.9 billion, $6.4 billion, and $8.8 billion which includes amortization of property and equipment acquired under capital leases of $2.7 billion, $3.8 billion, and $5.4 billion for 2015, 2016, and 2017. Gross assets recorded under capital leases were $17.0 billion and $26.4 billion as of December 31, 2016 and 2017. Accumulated depreciation associated with capital leases was $8.5 billion and $13.4 billion as of December 31, 2016 and 2017.

We capitalize construction in progress and record a corresponding long-term liability for build-to-suit lease agreements where we are considered the owner, for accounting purposes, during the construction period. For buildings under build-to-suit lease arrangements where we have taken occupancy, which do not qualify for sales recognition under the sale-leaseback accounting guidance, we determined that we continue to be the deemed owner of these buildings. This is principally due to our significant investment in tenant improvements. As a result, the buildings are being depreciated over the shorter of their useful lives or the related leases’ terms. Additionally, certain build-to-suit lease arrangements and finance leases provide purchase options. Upon occupancy, the long-term construction obligations are considered long-term finance lease obligations with amounts payable during the next 12 months recorded as “Accrued expenses and other.” Gross assets remaining under finance leases were $2.9 billion and $5.4 billion as of December 31, 2016 and 2017. Accumulated depreciation associated with finance leases was $361 million and $635 million as of December 31, 2016 and 2017.