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Retirement benefits (Tables)
 12 Months Ended
Aug. 31, 2017
Compensation and Retirement Disclosure [Abstract]  
Schedule of percentage of defined benefit pension plan assets
Defined benefit pension plan assets were invested in the following classes of securities as of August 31:

Percentage of fair market value
 
2017
 
2016
Equity securities
 
10.6%
 
8.9%
Debt securities
 
83.3%
 
78.8%
Real estate
 
5.3%
 
4.3%
Other
 
0.8%
 
8.0%
Schedule of defined benefit plans using fair value hierarchy
The following table presents defined benefit pension plan assets using the fair value hierarchy as of August 31, 2017 (in millions).

 
 
August 31, 2017
 
Level 1
 
Level 2
 
Level 3
Equity securities:
 
 
 
 
 
 
 
 
Equity securities1
 
$
956

 
$
—

 
$
956

 
$
—

 
 
 
 
 
 
 
 
 
Debt securities:
 
 

 
 

 
 

 
 

Fixed interest government bonds2
 
217

 
—

 
217

 
—

Index linked government bonds2
 
3,354

 
—

 
3,354

 
—

Corporate bonds3
 
3,251

 
—

 
3,251

 
—

 
 
 
 
 
 
 
 
 
Real estate:
 
 

 
 
 
 

 
 
Real estate4
 
461

 
—

 
—

 
461

 
 
 
 
 
 
 
 
 
Other:
 
 

 
 

 
 

 
 

Other investments5
 
741

 
58

 
583

 
100

 
 
 
 
 
 
 
 
 
Total
 
$
8,980

 
$
58

 
$
8,361

 
$
561

 
 
August 31, 2016
 
Level 1
 
Level 2
 
Level 3
Equity securities:
 
 
 
 
 
 
 
 
Equity securities1
 
$
834

 
$
—

 
$
834

 
$
—

 
 
 
 
 
 
 
 
 
Debt securities:
 
 

 
 

 
 

 
 

Fixed interest government bonds2
 
265

 
—

 
265

 
—

Index linked government bonds2
 
3,502

 
—

 
3,502

 
—

Corporate bonds3
 
3,663

 
—

 
3,663

 
—

 
 
 
 
 
 
 
 
 
Real estate:
 
 

 
 

 
 

 
 

Real estate4
 
411

 
—

 
—

 
411

 
 
 
 
 
 
 
 
 
Other:
 
 

 
 

 
 

 
 

Other investments5
 
753

 
38

 
713

 
2

 
 
 
 
 
 
 
 
 
Total
 
$
9,428

 
$
38

 
$
8,977

 
$
413


1 
Equity securities, which mainly comprise investments in commingled funds, are valued based on quoted prices and are primarily exchange-traded. Securities for which official close or last trade pricing on an active exchange is available are classified as Level 1 investments. If closing prices are not available, securities are valued at the last quoted bid price and typically are categorized as Level 2 investments.
2 
Debt securities: government bonds comprise fixed interest and index linked bonds issued by central governments, and are valued based on quotes received from independent pricing services or from dealers who make markets in such securities. Pricing services utilize pricing which considers readily available inputs such as the yield or price of bonds of comparable quality, coupon, maturity, and type, as well as dealer-supplied prices. Government bonds are categorized as Level 2 investments.
3 
Debt securities: corporate bonds comprise bonds issued by corporations and are valued using recently executed transactions, or quoted market prices for similar assets and liabilities in active markets, or for identical assets and liabilities in markets that are not active. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices. Corporate bonds are categorized as Level 2 investments.
4 
Real estate comprises investments in certain property funds which are valued based on the value of the underlying properties. These properties are valued using a number of standard industry techniques such as cost, discounted cash flows, independent appraisals and market based comparable data. Real estate investments are categorized as Level 3 investments. Change in Level 3 investments driven primarily by currency fluctuations.
5 
Other investments mainly comprise cash and cash equivalents, derivatives and direct private placements. Cash is categorized as a Level 1 investment. Cash equivalents are valued using observable yield curves, discounting and interest rates and are categorized as Level 2 investments. Derivatives which are exchange-traded and for which market quotations are readily available are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market, or exchange on which they are traded, and are categorized as Level 1 investments. Over-the-counter derivatives typically are valued by independent pricing services and are categorized as Level 2 investments. Direct private placements are typically bonds valued by reference to comparable bonds and are categorized as Level 3 investments.
Components of net periodic benefit costs
Components of net periodic pension costs for the defined benefit pension plans (in millions):

 
 
Boots and other
pension plans
 
 
2017
 
2016
Service costs
 
$
5

 
$
4

Interest costs
 
174

 
308

Expected returns on plan assets/other
 
(146
)
 
(249
)
Total net periodic pension costs
 
$
33

 
$
63
Accumulated and projected benefit obligations
Change in benefit obligations for the defined benefit pension plans (in millions):

 
 
2017
 
2016
Benefit obligation at beginning of year
 
$
9,463

 
$
8,635

Service costs
 
5

 
4

Interest costs
 
174

 
308

Amendments/other
 
(11
)
 
(2
)
Net actuarial (gain) loss
 
(295
)
 
2,272

Benefits paid
 
(298
)
 
(277
)
Currency translation adjustments
 
(158
)
 
(1,477
)
Benefit obligation at end of year
 
$
8,880

 
$
9,463
Changes in fair value of plan assets
Change in plan assets for the defined benefit pension plans (in millions):

 
 
2017
 
2016
Plan assets at fair value at beginning of year
 
$
9,428

 
$
8,936

Employer contributions
 
70

 
75

Benefits paid
 
(298
)
 
(277
)
Return on assets/other
 
(52
)
 
2,216

Currency translation adjustments
 
(168
)
 
(1,522
)
Plan assets at fair value at end of year
 
$
8,980

 
$
9,428
Amounts recognized in balance sheet
Amounts recognized in the Consolidated Balance Sheets (in millions):

 
 
2017
 
2016
Other non-current assets
 
$
278

 
$
155

Accrued expenses and other liabilities
 
(7
)
 
(6
)
Other non-current liabilities
 
(171
)
 
(184
)
Net asset (liability) recognized at end of year
 
$
100

 
$
(35
)
Pre-tax amounts recognized in accumulated other comprehensive (income) loss
Pre-tax amounts recognized in accumulated other comprehensive (income) loss (in millions):

 
 
2017
 
2016
Net actuarial loss
 
$
171

 
$
258
Amounts in accumulated other comprehensive income (loss) to be recognized over next fiscal year
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans, including accumulated benefit obligations in excess of plan assets, at August 31, 2017 were as follows (in millions):
 
 
 
2017
 
2016
Projected benefit obligation
 
$
8,880

 
$
9,463

Accumulated benefit obligation
 
8,861

 
9,457

Fair value of plan assets
 
8,980

 
9,428
Estimated future benefit payments
Estimated future benefit payments from defined benefit pension plans to participants are as follows (in millions):

 
Estimated future
benefit payments
2018
$
303

2019
238

2020
249

2021
263

2022
277

2023-2027
1,629
Schedule of assumptions used
The assumptions used in accounting for the defined benefit pension plans were as follows:

 
 
2017
 
2016
Weighted-average assumptions used to determine benefit obligations
 
 
 
 
Discount rate
 
2.41
%
 
2.17
%
Rate of compensation increase
 
2.83
%
 
2.44
%
 
 
 
 
 
Weighted-average assumptions used to determine net periodic benefit cost
 
 

 
 

Discount rate
 
2.16
%
 
3.87
%
Expected long-term return on plan assets
 
1.69
%
 
3.05
%
Rate of compensation increase
 
2.44
%
 
2.55
%