Income taxes (Tables)

12 Months Ended

Aug. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of income before income tax, domestic and foreign

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

	2018		2017		2016
U.S.	$	3,292	$	1,953	$	2,577
Non–U.S.	2,683		2,900		2,567
Total	$	5,975	$	4,853	$	5,144

Provisions for income taxes

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

	2018			2017			2016
Current provision
Federal	$	866		$	759		$	999
State	103			45			56
Non–U.S.	353			390			371
	1,322			1,194			1,426
Deferred provision
Federal – tax law change	(648		)	—			—
Federal – excluding tax law change	304			(306		)	(183		)
State	78			(24		)	6
Non–U.S. – tax law change	—			(80		)	(182		)
Non–U.S. – excluding tax law change	(58		)	(24		)	(70		)
	(324		)	(434		)	(429		)
Income tax provision	$	998		$	760		$	997

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:

	2018		2017		2016
Federal statutory rate	25.7	%	35.0	%	35.0	%
State income taxes, net of federal benefit	2.3		0.3		0.8
Foreign income taxed at non-U.S. rates	(12.2	)	(11.8	)	(7.8	)
Non-taxable income	(5.2	)	(5.3	)	(4.4	)
Non-deductible expenses	2.1		1.5		1.1
Transition tax	12.4		—		—
Tax law changes	(10.9	)	(1.6	)	(3.5	)
Change in valuation allowance	8.7		0.7		1.7
Tax credits	(6.9	)	(2.9	)	(1.5	)
Other	0.7		(0.2	)	(2.0	)
Effective income tax rate	16.7	%	15.7	%	19.4	%

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):

	2018		2017
Deferred tax assets:
Postretirement benefits	$	—	$	134
Compensation and benefits	152		207
Insurance	74		109
Accrued rent	271		174
Outside basis difference	—		55
Allowance for doubtful accounts	27		55
Tax attributes	2,351		555
Stock compensation	44		73
Deferred income	110		220
Other	44		88
	3,073		1,670
Less: valuation allowance	2,226		408
Total deferred tax assets	847		1,262
Deferred tax liabilities:
Accelerated depreciation	603		841
Inventory	301		416
Intangible assets	1,234		1,277
Equity method investment	459		1,002
	2,597		3,536
Net deferred tax liabilities	$	1,750	$	2,274

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):

	2018			2017			2016
Balance at beginning of year	$	409		$	269		$	261
Gross increases related to tax positions in a prior period	123			151			21
Gross decreases related to tax positions in a prior period	(15		)	(36		)	(47		)
Gross increases related to tax positions in the current period	29			33			68
Settlements with taxing authorities	(87		)	(2		)	(17		)
Currency	—			(1		)	(11		)
Lapse of statute of limitations	(3		)	(5		)	(6		)
Balance at end of year	$	456		$	409		$	269