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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission File Number: 001-34448
acn-20201130_g1.gif
Accenture plc
(Exact name of registrant as specified in its charter)
Ireland98-0627530
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1 Grand Canal Square,
Grand Canal Harbour,
Dublin 2, Ireland
(Address of principal executive offices)
(353) (1646-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A ordinary shares, par value $0.0000225 per shareACNNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☑
The number of shares of the registrant’s Class A ordinary shares, par value $0.0000225 per share, outstanding as of December 7, 2020 was 661,135,130 (which number includes 26,889,663 issued shares held by the registrant). The number of shares of the registrant’s Class X ordinary shares, par value $0.0000225 per share, outstanding as of December 7, 2020 was 526,879.



Table of Contents
Page
Part I.
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts)
ACCENTURE FORM 10-Q
3
Part I — Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
November 30, 2020 and August 31, 2020
November 30, 2020August 31, 2020
ASSETS(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents$8,594,003 $8,415,330 
Short-term investments83,148 94,309 
Receivables and contract assets8,547,711 7,846,892 
Other current assets1,401,232 1,393,225 
Total current assets18,626,094 17,749,756 
NON-CURRENT ASSETS:
Contract assets44,517 43,257 
Investments298,906 324,514 
Property and equipment, net1,506,825 1,545,568 
Lease assets3,100,120 3,183,346 
Goodwill8,127,411 7,709,820 
Deferred contract costs715,897 723,168 
Deferred tax assets4,178,723 4,153,146 
Other non-current assets1,669,818 1,646,018 
Total non-current assets19,642,217 19,328,837 
TOTAL ASSETS$38,268,311 $37,078,593 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings$8,925 $7,820 
Accounts payable1,513,442 1,349,874 
Deferred revenues3,524,781 3,636,741 
Accrued payroll and related benefits5,179,301 5,083,950 
Income taxes payable445,824 453,542 
Lease liabilities732,878 756,057 
Accrued consumption taxes706,876 662,409 
Other accrued liabilities707,072 712,197 
Total current liabilities12,819,099 12,662,590 
NON-CURRENT LIABILITIES:
Long-term debt59,881 54,052 
Deferred revenues668,267 690,931 
Retirement obligation1,875,976 1,859,444 
Deferred tax liabilities201,376 179,703 
Income taxes payable995,478 930,695 
Lease liabilities2,627,185 2,667,584 
Other non-current liabilities594,833 534,421 
Total non-current liabilities7,022,996 6,916,830 
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of November 30, 2020 and August 31, 2020
57 57 
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 660,518,888 and 658,548,895 shares issued as of November 30, 2020 and August 31, 2020, respectively
15 15 
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 526,879 and 527,509 shares issued and outstanding as of November 30, 2020 and August 31, 2020, respectively
  
Restricted share units1,721,681 1,585,302 
Additional paid-in capital7,551,089 7,167,227 
Treasury shares, at cost: Ordinary, 40,000 shares as of November 30, 2020 and August 31, 2020; Class A ordinary, 26,898,686 and 24,383,369 shares as of November 30, 2020 and August 31, 2020, respectively
(3,163,841)(2,565,761)
Retained earnings13,276,702 12,375,533 
Accumulated other comprehensive loss(1,479,202)(1,561,837)
Total Accenture plc shareholders’ equity17,906,501 17,000,536 
Noncontrolling interests519,715 498,637 
Total shareholders’ equity18,426,216 17,499,173 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$38,268,311 $37,078,593 
The accompanying Notes are an integral part of these Consolidated Financial Statements.


Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts)
ACCENTURE FORM 10-Q
4
Consolidated Income Statements
For the Three Months Ended November 30, 2020 and 2019
(Unaudited)
20202019
REVENUES:
Revenues $11,762,185 $11,358,958 
OPERATING EXPENSES:
Cost of services 7,863,889 7,711,199 
Sales and marketing 1,227,176 1,191,123 
General and administrative costs 780,451 689,373 
Total operating expenses9,871,516 9,591,695 
OPERATING INCOME1,890,669 1,767,263 
Interest income10,685 27,419 
Interest expense(8,854)(5,474)
Other income (expense), net 94,367 11,439 
INCOME BEFORE INCOME TAXES1,986,867 1,800,647 
Income tax expense464,810 425,479 
NET INCOME1,522,057 1,375,168 
Net income attributable to noncontrolling interest in Accenture Canada Holdings Inc.(1,700)(1,741)
Net income attributable to noncontrolling interests – other(20,081)(16,459)
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC$1,500,276 $1,356,968 
Weighted average Class A ordinary shares:
Basic634,271,482 635,722,309 
Diluted646,879,735 649,389,444 
Earnings per Class A ordinary share:
Basic$2.37 $2.13 
Diluted$2.32 $2.09 
Cash dividends per share$0.88 $0.80 
The accompanying Notes are an integral part of these Consolidated Financial Statements.


Consolidated Financial Statements
(In thousands of U.S. dollars)
ACCENTURE FORM 10-Q
5
Consolidated Statements Of Comprehensive Income
For the Three Months Ended November 30, 2020 and 2019
(Unaudited)
20202019
NET INCOME$1,522,057 $1,375,168 
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation67,312 37,730 
Defined benefit plans10,881 8,752 
Cash flow hedges4,393 14,127 
Investments49  
OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC82,635 60,609 
Other comprehensive income (loss) attributable to noncontrolling interests1,461 1,180 
COMPREHENSIVE INCOME$1,606,153 $1,436,957 
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC$1,582,911 $1,417,577 
Comprehensive income attributable to noncontrolling interests23,242 19,380 
COMPREHENSIVE INCOME$1,606,153 $1,436,957 
The accompanying Notes are an integral part of these Consolidated Financial Statements.



Consolidated Financial Statements
(In thousands of U.S. dollars and share amounts)
ACCENTURE FORM 10-Q
6
Consolidated Shareholders’ Equity Statement
For the Three Months Ended November 30, 2020
(Unaudited)
 Ordinary
Shares
Class A
Ordinary
Shares
Class X
Ordinary
Shares
Restricted
Share
Units
Additional
Paid-in
Capital
Treasury SharesRetained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Accenture plc
Shareholders’
Equity
Noncontrolling
Interests
Total
Shareholders’
Equity
 $No.
Shares
$No.
Shares
$No.
Shares
$No.
Shares
Balance as of August 31, 2020$57 40 $15 658,549 $ 528 $1,585,302 $7,167,227 $(2,565,761)(24,423)$12,375,533 $(1,561,837)$17,000,536 $498,637 $17,499,173 
Net income1,500,276 1,500,276 21,781 1,522,057 
Other comprehensive income (loss)82,635 82,635 1,461 84,096 
Purchases of Class A shares765 (768,395)(3,341)(767,630)(765)(768,395)
Share-based compensation expense270,226 41,095 311,321 311,321 
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares(1)(500)(500)(500)
Issuances of Class A shares for employee share programs1,970 (153,073)343,783 170,315 825 (22,462)338,563 328 338,891 
Dividends19,226 (576,645)(557,419)(633)(558,052)
Other, net(1,281)(1,281)(1,094)(2,375)
Balance as of November 30, 2020$57 40 $15 660,519 $ 527 $1,721,681 $7,551,089 $(3,163,841)(26,939)$13,276,702 $(1,479,202)$17,906,501 $519,715 $18,426,216 
The accompanying Notes are an integral part of these Consolidated Financial Statements.



Consolidated Financial Statements
(In thousands of U.S. dollars and share amounts)
ACCENTURE FORM 10-Q
7
Consolidated Shareholders’ Equity Statement — (continued)
For the Three Months Ended November 30, 2019
(Unaudited)
 Ordinary
Shares
Class A
Ordinary
Shares
Class X
Ordinary
Shares
Restricted
Share
Units
Additional
Paid-in
Capital
Treasury SharesRetained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Accenture plc
Shareholders’
Equity
Noncontrolling
Interests
Total
Shareholders’
Equity
 $No.
Shares
$No.
Shares
$No.
Shares
$No.
Shares
Balance as of August 31, 2019$57 40 $15 654,739 $ 609 $1,411,903 $5,804,448 $(1,388,376)(19,005)$10,421,538 $(1,840,577)$14,409,008 $418,683 $14,827,691 
Net income1,356,968 1,356,968 18,200 1,375,168 
Other comprehensive income (loss)60,609 60,609 1,180 61,789 
Purchases of Class A shares811 (724,618)(3,821)(723,807)(811)(724,618)
Share-based compensation expense238,677 36,252 274,929 274,929 
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares(15)(4,593)(4,593)(4,593)
Issuances of Class A shares for employee share programs2,207 (142,925)323,660 135,603 836 (16,263)300,075 325 300,400 
Dividends18,243 (525,968)(507,725)(656)(508,381)
Other, net1,674 1,674 (2,851)(1,177)
Balance as of November 30, 2019$57 40 $15 656,946 $ 594 $1,525,898 $6,162,252 $(1,977,391)(21,990)$11,236,275 $(1,779,968)$15,167,138 $434,070 $15,601,208 
The accompanying Notes are an integral part of these Consolidated Financial Statements.




Consolidated Financial Statements
(In thousands of U.S. dollars)
ACCENTURE FORM 10-Q
8

Consolidated Cash Flows Statements
For the Three Months Ended November 30, 2020 and 2019
(Unaudited)
20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$1,522,057 $1,375,168 
Adjustments to reconcile Net income to Net cash provided by (used in) operating activities —
Depreciation, amortization and other468,200 399,458 
Share-based compensation expense311,321 274,929 
Deferred tax expense (benefit)(19,096)36,591 
Other, net(103,806)(120,927)
Change in assets and liabilities, net of acquisitions —
Receivables and contract assets, current and non-current(594,475)(436,872)
Other current and non-current assets(18,129)(101,096)
Accounts payable148,495 (61,929)
Deferred revenues, current and non-current(151,356)(185,313)
Accrued payroll and related benefits48,385 (261,592)
Income taxes payable, current and non-current34,755 84,840 
Other current and non-current liabilities(43,506)(216,346)
Net cash provided by (used in) operating activities1,602,845 786,911 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment(93,115)(95,063)
Purchases of businesses and investments, net of cash acquired(503,843)(109,848)
Proceeds from sales of businesses and investments149,002 39,200 
Other investing, net1,549 (182)
Net cash provided by (used in) investing activities(446,407)(165,893)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares338,891 300,400 
Purchases of shares(768,895)(729,211)
Proceeds from (repayments of) long-term debt, net(82)(570)
Cash dividends paid(558,052)(508,381)
Other, net(11,313)(10,462)
Net cash provided by (used in) financing activities(999,451)(948,224)
Effect of exchange rate changes on cash and cash equivalents21,686 10,890 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS178,673 (316,316)
CASH AND CASH EQUIVALENTS, beginning of period
8,415,330 6,126,853 
CASH AND CASH EQUIVALENTS, end of period
$8,594,003 $5,810,537 
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net$344,628 $292,787 
The accompanying Notes are an integral part of these Consolidated Financial Statements.


Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
ACCENTURE FORM 10-Q
9

1. Basis Of Presentation
The accompanying unaudited interim Consolidated Financial Statements of Accenture plc and its controlled subsidiary companies have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. We use the terms “Accenture,” “we” and “our” in the Notes to Consolidated Financial Statements to refer to Accenture plc and its subsidiaries. These Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on October 22, 2020.
The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from those estimates. The Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair presentation of results for these interim periods. The results of operations for the three months ended November 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2021.
Allowance for Credit Losses - Client Receivables and Contract Assets
We record client receivables and contract assets at their face amounts less an allowance for credit losses. The allowance represents our estimate of expected credit losses based on historical experience, current economic conditions and certain forward-looking information. As of November 30, 2020 and August 31, 2020, the total allowance for credit losses recorded for client receivables and contract assets was $38,315 and $40,277, respectively. The change in the allowance is primarily due to immaterial write-offs and changes in gross client receivables and contract assets.
Concentrations of Credit Risk
Our financial instruments, consisting primarily of cash and cash equivalents, foreign currency exchange rate instruments and client receivables, are exposed to concentrations of credit risk. We place our cash and cash equivalents and foreign exchange instruments with highly-rated financial institutions, limit the amount of credit exposure with any one financial institution and conduct ongoing evaluations of the credit worthiness of the financial institutions with which we do business. Client receivables are dispersed across many different industries and countries; therefore, concentrations of credit risk are limited.
Investments
All available-for-sale securities and liquid investments with an original maturity greater than three months but less than one year are considered to be Short-term investments. Non-current investments consist of equity securities in publicly-traded and privately-held companies and are accounted for using either the equity or fair value measurement alternative method of accounting (for investments without readily determinable fair values).
Our non-current investments are as follows:
November 30, 2020August 31, 2020
Equity method investments$211,765 $240,446 
Investments without readily determinable fair values87,141 84,068 
Total non-current investments$298,906 $324,514 
For investments in which we can exercise significant influence but do not control, we use the equity method of accounting. Equity method investments are initially recorded at cost and our proportionate share of gains and losses of the investee are included as a component of other income (expense), net. Our equity method investments consist primarily of an investment in Duck Creek Technologies. As of November 30, 2020 and August 31, 2020, the carrying amount of our investment was $201,810 and $230,219, and the estimated fair value of our approximately 19% and 22% ownership was $850,825 and $956,308, respectively.


Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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We account for the investment under the equity method because we have the ability to influence operations through the combination of our voting power and through other factors, such as representation on the board and our business relationship.
Depreciation and Amortization
As of November 30, 2020 and August 31, 2020, total accumulated depreciation was $2,414,951 and $2,313,731, respectively. See table below for summary of depreciation on fixed assets, deferred transition amortization, intangible assets amortization and operating lease cost for the three months ended November 30, 2020 and 2019, respectively.
 Three Months Ended
 November 30, 2020November 30, 2019
Depreciation$133,918 $97,090 
Amortization - Deferred transition81,356 67,914 
Amortization - Intangible assets67,207 53,372 
Other - Operating lease cost185,719 181,082 
Total depreciation, amortization and other$468,200 $399,458 
Recently Adopted Accounting Pronouncements
Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-13 (“Topic 326”)
On September 1, 2020, we adopted FASB ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends guidance on recognition and measurement of credit losses and related disclosures. The amendments replace the existing incurred loss impairment model with a methodology to measure and recognize lifetime expected credit losses for all in-scope financial assets, including accounts receivable and contract assets. The adoption did not have an impact on our Consolidated Financial Statements.






Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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2. Revenues
Disaggregation of Revenue
See Note 11 (Segment Reporting) to these Consolidated Financial Statements for our disaggregated revenues.
Remaining Performance Obligations
We had remaining performance obligations of approximately $19 billion and $20 billion as of November 30, 2020 and August 31, 2020, respectively. Our remaining performance obligations represent the amount of transaction price for which work has not been performed and revenue has not been recognized. The majority of our contracts are terminable by the client on short notice with little or no termination penalties, and some without notice. Under Topic 606, only the non-cancelable portion of these contracts is included in our performance obligations. Additionally, our performance obligations only include variable consideration if we assess it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. Based on the terms of our contracts, a significant portion of what we consider contract bookings is not included in our remaining performance obligations. We expect to recognize approximately 62% of our remaining performance obligations as of November 30, 2020 as revenue in fiscal 2021, an additional 19% in fiscal 2022, and the balance thereafter.
Contract Estimates
Adjustments in contract estimates related to performance obligations satisfied or partially satisfied in prior periods were immaterial for the three months ended November 30, 2020 and 2019, respectively.
Contract Balances
Deferred transition revenues were $668,267 and $690,931 as of November 30, 2020 and August 31, 2020, respectively, and are included in Non-current deferred revenues. Costs related to these activities are also deferred and are expensed as the services are provided. Deferred transition costs were $715,897 and $723,168 as of November 30, 2020 and August 31, 2020, respectively, and are included in Deferred contract costs. Generally, deferred amounts are protected in the event of early termination of the contract and are monitored regularly for impairment. Impairment losses are recorded when projected remaining undiscounted operating cash flows of the related contract are not sufficient to recover the carrying amount of contract assets.
The following table provides information about the balances of our Receivables and Contract assets, net of allowance, and Contract liabilities (Deferred revenues):
As of November 30, 2020As of August 31, 2020
Receivables$7,799,770 $7,192,110 
Contract assets (current)747,941 654,782 
Receivables and contract assets, net of allowance (current)8,547,711 7,846,892 
Contract assets (non-current)44,517 43,257 
Deferred revenues (current)3,524,781 3,636,741 
Deferred revenues (non-current)668,267 690,931 
Changes in the contract asset and liability balances during the three months ended November 30, 2020, were a result of normal business activity and not materially impacted by any other factors.
Revenues recognized during the three months ended November 30, 2020 that were included in Deferred revenues as of August 31, 2020 were $2.0 billion. Revenues recognized during the three months ended November 30, 2019 that were included in Deferred revenues as of August 31, 2019 were $1.8 billion.


Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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3. Earnings Per Share
Basic and diluted earnings per share are calculated as follows:
 Three Months Ended
 November 30, 2020November 30, 2019
Basic earnings per share
Net income attributable to Accenture plc$1,500,276 $1,356,968 
Basic weighted average Class A ordinary shares634,271,482 635,722,309 
Basic earnings per share$2.37 $2.13 
Diluted earnings per share
Net income attributable to Accenture plc$1,500,276 $1,356,968 
Net income attributable to noncontrolling interest in Accenture Canada Holdings Inc. (1)1,700 1,741 
Net income for diluted earnings per share calculation$1,501,976 $1,358,709 
Basic weighted average Class A ordinary shares634,271,482 635,722,309 
Class A ordinary shares issuable upon redemption/exchange of noncontrolling interest (1)718,767 815,515 
Diluted effect of employee compensation related to Class A ordinary shares11,633,343 12,626,225 
Diluted effect of share purchase plans related to Class A ordinary shares256,143 225,395 
Diluted weighted average Class A ordinary shares646,879,735 649,389,444 
Diluted earnings per share$2.32 $2.09 
(1)Diluted earnings per share assumes the exchange of all Accenture Canada Holdings Inc. exchangeable shares for Accenture plc Class A ordinary shares on a one-for-one basis. The income effect does not take into account “Net income attributable to noncontrolling interests - other,” since those shares are not redeemable or exchangeable for Accenture plc Class A ordinary shares.




Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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4. Accumulated Other Comprehensive Loss
The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive loss attributable to Accenture plc:
Three Months Ended
November 30, 2020November 30, 2019
Foreign currency translation
    Beginning balance$(1,010,279)$(1,207,975)
             Foreign currency translation67,443 40,145 
             Income tax benefit (expense) 1,313 (1,264)
             Portion attributable to noncontrolling interests(1,444)(1,151)
             Foreign currency translation, net of tax67,312 37,730 
    Ending balance(942,967)(1,170,245)
Defined benefit plans
    Beginning balance(615,223)(672,323)
             Reclassifications into net periodic pension and
post-retirement expense (1)
13,595 12,784 
             Income tax benefit (expense)(2,702)(4,021)
             Portion attributable to noncontrolling interests(12)(11)
             Defined benefit plans, net of tax10,881 8,752 
    Ending balance(604,342)(663,571)
Cash flow hedges
    Beginning balance63,714 38,993 
             Unrealized gain (loss) 25,364 38,408 
             Reclassification adjustments into Cost of services(20,895)(20,019)
             Income tax benefit (expense) (71)(4,244)
             Portion attributable to noncontrolling interests(5)(18)
             Cash flow hedges, net of tax4,393 14,127 
    Ending balance (2)68,107 53,120 
Investments
    Beginning balance(49)728 
             Unrealized gain (loss)49  
             Income tax benefit (expense)  
             Portion attributable to noncontrolling interests  
             Investments, net of tax49  
    Ending balance 728 
Accumulated other comprehensive loss$(1,479,202)$(1,779,968)
(1)Reclassifications into net periodic pension and post-retirement expense are recognized in Cost of services, Sales and marketing, General and administrative costs and non-operating expenses.
(2)As of November 30, 2020, $66,522 of net unrealized gains related to derivatives designated as cash flow hedges is expected to be reclassified into Cost of services in the next twelve months.


Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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5. Business Combinations
During the three months ended November 30, 2020, we completed individually immaterial acquisitions for total consideration of $493,354, net of cash acquired. The pro forma effects of these acquisitions on our operations were not material.

6. Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill by reportable operating segment are as follows:
August 31,
2020
Additions/
Adjustments
Foreign
Currency
Translation
November 30,
2020
North America$4,604,441 $225,619 $647 $4,830,707 
Europe2,138,088 120,090 9,356 2,267,534 
Growth Markets967,291 48,909 12,970 1,029,170 
Total$7,709,820 $394,618 $22,973 $8,127,411 
Goodwill includes immaterial adjustments related to prior period acquisitions.
Intangible Assets
Our definite-lived intangible assets by major asset class are as follows:
August 31, 2020November 30, 2020
Intangible Asset ClassGross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Customer-related$1,319,332 $(495,367)$823,965 $1,386,214 $(527,370)$858,844 
Technology150,765 (55,543)95,222 170,600 (56,977)113,623 
Patents129,295 (66,954)62,341 128,399 (65,928)62,471 
Other82,676 (34,986)47,690 82,622 (36,575)46,047 
Total$1,682,068 $(652,850)$1,029,218 $1,767,835 $(686,850)$1,080,985 
Total amortization related to our intangible assets was $67,207 and $53,372 for the three months ended November 30, 2020 and 2019, respectively. Estimated future amortization related to intangible assets held as of November 30, 2020 is as follows:
Fiscal YearEstimated Amortization
Remainder of 2021$179,796 
2022198,541 
2023178,958 
2024158,361 
2025138,373 
Thereafter226,956 
Total$1,080,985 


Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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7. Shareholders’ Equity
Dividends
Our dividend activity during the three months ended November 30, 2020 is as follows:
 Dividend Per
Share
Accenture plc Class A
Ordinary Shares
Accenture Canada Holdings
Inc. Exchangeable Shares
Total Cash
Outlay
Dividend Payment DateRecord DateCash OutlayRecord DateCash Outlay
November 13, 2020$0.88 October 13, 2020$557,419 October 9, 2020$633 $558,052 
The payment of the cash dividends also resulted in the issuance of an immaterial number of additional restricted share units to holders of restricted share units.
Subsequent Event
On December 16, 2020, the Board of Directors of Accenture plc declared a quarterly cash dividend of $0.88 per share on its Class A ordinary shares for shareholders of record at the close of business on January 14, 2021 payable on February 12, 2021. The payment of the cash dividend will result in the issuance of an immaterial number of additional restricted share units to holders of restricted share units.




Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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8. Financial Instruments
Derivatives
In the normal course of business, we use derivative financial instruments to manage foreign currency exchange rate risk. Our derivative financial instruments consist of deliverable and non-deliverable foreign currency forward contracts.
Cash Flow Hedges
For a cash flow hedge, the effective portion of the change in estimated fair value of a hedging instrument is recorded in Accumulated other comprehensive loss as a separate component of Shareholders’ Equity and is reclassified into Cost of services in the Consolidated Income Statements during the period in which the hedged transaction is recognized. For information related to derivatives designated as cash flow hedges that were reclassified into Cost of services during the three months ended November 30, 2020 and 2019, as well as those expected to be reclassified into Cost of services in the next 12 months, see Note 4 (Accumulated Other Comprehensive Loss) to these Consolidated Financial Statements.
Other Derivatives
Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were net gains of $28,324 and net losses $56,619 for the three months ended November 30, 2020 and 2019, respectively. Gains and losses on these contracts are recorded in Other income (expense), net in the Consolidated Income Statements and are offset by gains and losses on the related hedged items.
Fair Value of Derivative Instruments
The notional and fair values of all derivative instruments are as follows:
November 30, 2020August 31, 2020
Assets
Cash Flow Hedges
Other current assets$79,405 $75,871 
Other non-current assets50,138 50,914 
Other Derivatives
Other current assets42,697 27,964 
Total assets$172,240 $154,749 
Liabilities
Cash Flow Hedges
Other accrued liabilities$12,883 $13,614 
Other non-current liabilities12,691 13,576 
Other Derivatives
Other accrued liabilities5,428 11,828 
Total liabilities$31,002 $39,018 
Total fair value$141,238 $115,731 
Total notional value$9,367,230 $9,600,691 
We utilize standard counterparty master agreements containing provisions for the netting of certain foreign currency transaction obligations and for the set-off of certain obligations in the event of an insolvency of one of the parties to the transaction. In the Consolidated Balance Sheets, we record derivative assets and liabilities at gross fair value. The potential effect of netting derivative assets against liabilities under the counterparty master agreements is as follows:
November 30, 2020August 31, 2020
Net derivative assets$159,030 $129,520 
Net derivative liabilities17,792 13,789 
Total fair value$141,238 $115,731 



Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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9. Income Taxes
We apply an estimated annual effective tax rate to our year-to-date operating results to determine the interim provision for income tax expense. In addition, we recognize taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior year as discrete items in the interim period in which the event occurs.
Our effective tax rates for the three months ended November 30, 2020 and 2019 were 23.4% and 23.6%, respectively. Absent the $119,700 and $60,492 gains on our investment in Duck Creek Technologies and related $22,906 and $10,183 in tax expense, our effective tax rates for the first quarter of fiscal 2021 and 2020 would have been 23.7% and 23.9%, respectively.

10. Commitments and Contingencies
Indemnifications and Guarantees
In the normal course of business and in conjunction with certain client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients with respect to certain matters.
As of November 30, 2020 and August 31, 2020, our aggregate potential liability to our clients for expressly limited guarantees involving the performance of third parties was approximately $848,000 and $832,000, respectively, of which all but approximately $81,000 and $87,000, respectively, may be recovered from the other third parties if we are obligated to make payments to the indemnified parties as a consequence of a performance default by the other third parties. For arrangements with unspecified limitations, we cannot reasonably estimate the aggregate maximum potential liability, as it is inherently difficult to predict the maximum potential amount of such payments, due to the conditional nature and unique facts of each particular arrangement.
To date, we have not been required to make any significant payment under any of the arrangements described above. We have assessed the current status of performance/payment risk related to arrangements with limited guarantees, warranty obligations, unspecified limitations and/or indemnification provisions and believe that any potential payments would be immaterial to the Consolidated Financial Statements, as a whole.
Legal Contingencies
As of November 30, 2020, we or our present personnel had been named as a defendant in various litigation matters. We and/or our personnel also from time to time are involved in investigations by various regulatory or legal authorities concerning matters arising in the course of our business around the world. Based on the present status of these matters, management believes the range of reasonably possible losses in addition to amounts accrued, net of insurance recoveries, will not have a material effect on our results of operations or financial condition.
On July 24, 2019, Accenture was named in a putative class action lawsuit filed by consumers of Marriott International, Inc. (“Marriott”) in the U.S. District Court for the District of Maryland. The complaint alleges negligence by us, and seeks monetary damages, costs and attorneys’ fees and other related relief, relating to a data security incident involving unauthorized access to the reservations database of Starwood Worldwide Resorts, Inc. (“Starwood”), which was acquired by Marriott on September 23, 2016. Since 2009, we have provided certain IT infrastructure outsourcing services to Starwood. On October 27, 2020, the court issued an order largely denying Accenture’s motion to dismiss the claims against us. We continue to believe the lawsuit is without merit and we will vigorously defend it. At present, we do not believe any losses from this matter will have a material effect on our results of operations or financial condition.



Notes To Consolidated Financial Statements
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
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11. Segment Reporting
Our reportable segments are our three geographic markets, which are North America, Europe and Growth Markets. Information regarding reportable segments, industry groups and type of work is as follows:
Revenues
 Three Months Ended
 November 30, 2020November 30, 2019
GEOGRAPHIC MARKETS
North America$5,480,963 $5,287,812 
Europe3,967,408 3,789,657 
Growth Markets2,313,814 2,281,489 
Total Revenues$11,762,185 $11,358,958 
INDUSTRY GROUPS (1)
Communications, Media & Technology$2,333,645 $2,245,470 
Financial Services2,346,291 2,190,107 
Health & Public Service2,211,889 1,969,214 
Products3,206,125 3,220,015 
Resources1,664,235 1,734,152 
Total Revenues$11,762,185 $11,358,958 
TYPE OF WORK
Consulting$6,332,572 $6,377,251 
Outsourcing5,429,613 4,981,707 
Total Revenues$11,762,185 $11,358,958 
(1)Effective September 1, 2020, we revised the reporting of our industry groups to include amounts previously reported in Other. Prior period amounts have been reclassified to conform with the current period presentation.
Operating Income
 Three Months Ended
 November 30, 2020November 30, 2019
GEOGRAPHIC MARKETS
North America$888,809 $828,407 
Europe629,430 558,951 
Growth Markets372,430 379,905 
Total Operating Income$1,890,669 $1,767,263 




ACCENTURE FORM 10-Q
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended August 31, 2020, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended August 31, 2020.
We use the terms “Accenture,” “we,” “our” and “us” in this report to refer to Accenture plc and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example, a reference to “fiscal 2021” means the 12-month period that will end on August 31, 2021. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.
We use the term “in local currency” so that certain financial results may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Financial results “in local currency” are calculated by restating current period activity into U.S. dollars using the comparable prior year period’s foreign currency exchange rates. This approach is used for all results where the functional currency is not the U.S. dollar.
Disclosure Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “positioned,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to those identified below. For a discussion of risks and actions taken in response to the coronavirus (COVID-19) pandemic, see the “Overview” below and “Our results of operations have been significantly adversely affected and could in the future be materially adversely impacted by the COVID-19 pandemic.” under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2020. Many of the following risks, uncertainties and other factors identified below are, and will be, amplified by the COVID-19 pandemic.
Our results of operations have been significantly adversely affected and could in the future be materially adversely impacted by the COVID-19 pandemic.
Our results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic and political conditions and the effects of these conditions on our clients’ businesses and levels of business activity.
Our business depends on generating and maintaining ongoing, profitable client demand for our services and solutions, including through the adaptation and expansion of our services and solutions in response to ongoing changes in technology and offerings, and a significant reduction in such demand or an inability to respond to the evolving technological environment could materially affect our results of operations.
If we are unable to keep our supply of skills and resources in balance with client demand around the world and attract and retain professionals with strong leadership skills, our business, the utilization rate of our professionals and our results of operations may be materially adversely affected.
We could face legal, reputational and financial risks if we fail to protect client and/or Accenture data from security incidents or cyberattacks.
The markets in which we operate are highly competitive, and we might not be able to compete effectively.


ACCENTURE FORM 10-Q
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
20

Our profitability could materially suffer if we are unable to obtain favorable pricing for our services and solutions, if we are unable to remain competitive, if our cost-management strategies are unsuccessful or if we experience delivery inefficiencies or fail to satisfy certain agreed-upon targets or specific service levels.
Changes in our level of taxes, as well as audits, investigations and tax proceedings, or changes in tax laws or in their interpretation or enforcement, could have a material adverse effect on our effective tax rate, results of operations, cash flows and financial condition.
Our ability to attract and retain business and employees may depend on our reputation in the marketplace.
As a result of our geographically diverse operations and our growth strategy to continue to expand in our key markets around the world, we are more susceptible to certain risks.
Our business could be materially adversely affected if we incur legal liability.
Our work with government clients exposes us to additional risks inherent in the government contracting environment.
Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates.
If we are unable to manage the organizational challenges associated with our size, we might be unable to achieve our business objectives.
If we do not successfully manage and develop our relationships with key alliance partners or if we fail to anticipate and establish new alliances in new technologies, our results of operations could be adversely affected.
We might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses.
If we are unable to protect or enforce our intellectual property rights, or if our services or solutions infringe upon the intellectual property rights of others or we lose our ability to utilize the intellectual property of others, our business could be adversely affected.
Our results of operations and share price could be adversely affected if we are unable to maintain effective internal controls.
Changes to accounting standards or in the estimates and assumptions we make in connection with the preparation of our consolidated financial statements could adversely affect our financial results.
We might be unable to access additional capital on favorable terms or at all. If we raise equity capital, it may dilute our shareholders’ ownership interest in us.
We are incorporated in Ireland and Irish law differs from the laws in effect in the United States and might afford less protection to our shareholders. We may also be subject to criticism and negative publicity related to our incorporation in Ireland.