Income taxes (Tables)

12 Months Ended

Aug. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of income before income tax, domestic and foreign

The components of earnings before income tax provision were (in millions):

	2019		2018		2017
U.S.	$	1,898	$	3,292	$	1,953
Non–U.S.	2,629		2,683		2,900
Total	$	4,527	$	5,975	$	4,853

Provisions for income taxes

The provision for income taxes consists of the following (in millions):

	2019			2018			2017
Current provision
Federal	$	201		$	866		$	759
State	46			103			45
Non–U.S.	241			353			390
	488			1,322			1,194
Deferred provision
Federal – tax law change	—			(648		)	—
Federal – excluding tax law change	151			304			(306		)
State	4			78			(24		)
Non–U.S. – tax law change	—			—			(80		)
Non–U.S. – excluding tax law change	(55		)	(58		)	(24		)
	100			(324		)	(434		)
Income tax provision	$	588		$	998		$	760

Difference between the statutory federal income tax rate and the effective tax rate

The difference between the statutory federal income tax rate and the effective tax rate is as follows:

	2019		2018		2017
Federal statutory rate	21.0	%	25.7	%	35.0	%
State income taxes, net of federal benefit	0.9		2.3		0.3
Foreign income taxed at non-U.S. rates	(2.1	)	(12.2	)	(11.8	)
Non-taxable income	(3.5	)	(5.2	)	(5.3	)
Non-deductible expenses	0.5		2.1		1.5
Transition tax	—		12.4		—
Tax law changes	(0.4	)	(10.9	)	(1.6	)
Change in valuation allowance1	1.9		8.7		0.7
Tax credits	(4.8	)	(6.9	)	(2.9	)
Other	(0.5	)	0.7		(0.2	)
Effective income tax rate	13.0	%	16.7	%	15.7	%

Deferred tax assets and liabilities included in the consolidated balance sheet

The deferred tax assets and liabilities included in the Consolidated Balance Sheets consist of the following (in millions):

	2019		2018
Deferred tax assets:
Compensation and benefits	133		152
Insurance	90		74
Accrued rent	219		271
Allowance for doubtful accounts	13		27
Tax attributes	6,687		2,351
Stock compensation	45		44
Deferred income	115		110
Other	78		44
	7,380		3,073
Less: valuation allowance	6,638		2,226
Total deferred tax assets	742		847
Deferred tax liabilities:
Accelerated depreciation	475		603
Inventory	394		301
Intangible assets	1,116		1,234
Equity method investment	481		459
	2,466		2,597
Net deferred tax liabilities	$	1,724	$	1,750

Reconciliation of the total amounts of unrecognized tax benefits

The following table provides a reconciliation of the total amounts of unrecognized tax benefits (in millions):

	2019			2018			2017
Balance at beginning of year	$	456		$	409		$	269
Gross increases related to tax positions in a prior period	33			123			151
Gross decreases related to tax positions in a prior period	(53		)	(15		)	(36		)
Gross increases related to tax positions in the current period	26			29			33
Settlements with taxing authorities	(2		)	(87		)	(2		)
Currency	—			—			(1		)
Lapse of statute of limitations	(5		)	(3		)	(5		)
Balance at end of year	$	455		$	456		$	409