Item 1. Financial Statements

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Item 1. Financial Statements

Consolidated Balance Sheets

May 31, 2023 and August 31, 2022


	May 31, 2023		August 31, 2022
ASSETS	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	8,535,446	$	7,889,833
Short-term investments	4,482		3,973
Receivables and contract assets	12,582,660		11,776,775
Other current assets	2,257,485		1,940,290
Total current assets	23,380,073		21,610,871
NON-CURRENT ASSETS:
Contract assets	66,432		46,844
Investments	176,259		317,972
Property and equipment, net	1,534,927		1,659,140
Lease assets	2,743,382		3,018,535
Goodwill	14,461,094		13,133,293
Deferred contract costs	852,188		807,940
Deferred tax assets	4,105,869		4,001,200
Other non-current assets	2,808,051		2,667,595
Total non-current assets	26,748,202		25,652,519
TOTAL ASSETS	$	50,128,275	$	47,263,390
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings	$	10,389	$	9,175
Accounts payable	2,388,474		2,559,485
Deferred revenues	5,101,692		4,478,048
Accrued payroll and related benefits	6,632,448		7,611,794
Income taxes payable	688,525		646,471
Lease liabilities	690,584		707,598
Other accrued liabilities	1,580,416		1,510,925
Total current liabilities	17,092,528		17,523,496
NON-CURRENT LIABILITIES:
Long-term debt	43,865		45,893
Deferred revenues	687,098		712,715
Retirement obligation	1,678,405		1,692,152
Deferred tax liabilities	402,984		318,584
Income taxes payable	1,270,733		1,198,139
Lease liabilities	2,351,375		2,563,090
Other non-current liabilities	539,358		462,233
Total non-current liabilities	6,973,818		6,992,806
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of May 31, 2023 and August 31, 2022	57		57
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 664,125,473 and 664,561,282 shares issued as of May 31, 2023 and August 31, 2022, respectively	15		15
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 335,238 and 500,837 shares issued and outstanding as of May 31, 2023 and August 31, 2022, respectively	—		—
Restricted share units	2,030,576		2,091,382
Additional paid-in capital	12,637,709		10,679,180
Treasury shares, at cost: Ordinary, 40,000 shares as of May 31, 2023 and August 31, 2022; Class A ordinary, 33,323,829 and 33,393,703 shares as of May 31, 2023 and August 31, 2022, respectively	(6,127,121)		(6,678,037)
Retained earnings	18,692,118		18,203,842
Accumulated other comprehensive loss	(1,900,923)		(2,190,342)
Total Accenture plc shareholders’ equity	25,332,431		22,106,097
Noncontrolling interests	729,498		640,991
Total shareholders’ equity	26,061,929		22,747,088
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	50,128,275	$	47,263,390

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents						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 and Nine Months Ended May 31, 2023 and 2022

(Unaudited)


	Three Months Ended				Nine Months Ended
	May 31, 2023		May 31, 2022		May 31, 2023		May 31, 2022
REVENUES:
Revenues	$	16,564,585	$	16,158,803	$	48,126,545	$	46,170,649
OPERATING EXPENSES:
Cost of services	11,035,515		10,844,069		32,576,567		31,415,167
Sales and marketing	1,738,621		1,660,919		4,852,207		4,530,158
General and administrative costs	1,084,288		1,050,697		3,209,539		3,126,332
Business optimization costs	346,873		—		591,263		—
Total operating expenses	14,205,297		13,555,685		41,229,576		39,071,657
OPERATING INCOME	2,359,288		2,603,118		6,896,969		7,098,992
Interest income	81,818		8,727		176,782		22,046
Interest expense	(11,208)		(12,050)		(30,122)		(34,449)
Other income (expense), net	201,783		(8,877)		136,576		(39,089)
Loss on disposition of Russia business	—		(96,294)		—		(96,294)
INCOME BEFORE INCOME TAXES	2,631,681		2,494,624		7,180,205		6,951,206
Income tax expense	583,346		675,308		1,584,887		1,654,631
NET INCOME	2,048,335		1,819,316		5,595,318		5,296,575
Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc.	(2,101)		(1,902)		(5,790)		(5,578)
Net income attributable to noncontrolling interests – other	(36,238)		(31,339)		(90,934)		(78,956)
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC	$	2,009,996	$	1,786,075	$	5,498,594	$	5,212,041
Weighted average Class A ordinary shares:
Basic	631,535,162		632,749,442		630,826,230		632,969,487
Diluted	638,743,434		641,004,741		638,404,751		643,692,440
Earnings per Class A ordinary share:
Basic	$	3.18	$	2.82	$	8.72	$	8.23
Diluted	$	3.15	$	2.79	$	8.62	$	8.11
Cash dividends per share	$	1.12	$	0.97	$	3.36	$	2.91

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents						Consolidated Financial Statements (In thousands of U.S. dollars)
ACCENTURE FORM 10-Q						5

Consolidated Statements of Comprehensive Income

For the Three and Nine Months Ended May 31, 2023 and 2022

(Unaudited)


	Three Months Ended				Nine Months Ended
	May 31, 2023		May 31, 2022		May 31, 2023		May 31, 2022
NET INCOME	$	2,048,335	$	1,819,316	$	5,595,318	$	5,296,575
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation	13,252		(231,311)		210,045		(442,664)
Defined benefit plans	6,722		10,292		104,941		6,865
Cash flow hedges	23,373		(57,642)		(25,567)		(98,850)

OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC	43,347		(278,661)		289,419		(534,649)
Other comprehensive income (loss) attributable to noncontrolling interests	827		(4,456)		6,165		(10,032)
COMPREHENSIVE INCOME	$	2,092,509	$	1,536,199	$	5,890,902	$	4,751,894

COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC	$	2,053,343	$	1,507,414	$	5,788,013	$	4,677,392
Comprehensive income attributable to noncontrolling interests	39,166		28,785		102,889		74,502
COMPREHENSIVE INCOME	$	2,092,509	$	1,536,199	$	5,890,902	$	4,751,894

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents						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 May 31, 2023

(Unaudited)


	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares			Restricted Share Units		Additional Paid-in Capital		Treasury Shares			Retained 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 February 28, 2023	$	57	40	$	15	662,406	$	—	339	$	1,636,155	$	12,163,671	$	(5,593,010)	(31,181)	$	17,500,001	$	(1,944,270)	$	23,762,619	$	694,659	$	24,457,278
Net income																	2,009,996				2,009,996		38,339		2,048,335
Other comprehensive income (loss)																			43,347		43,347		827		44,174
Purchases of Class A shares												703		(787,299)		(2,815)					(786,596)		(703)		(787,299)

Share-based compensation expense										406,504		66,191									472,695				472,695
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares									(4)			(1,638)									(1,638)				(1,638)
Issuances of Class A shares for employee share programs						1,719				(40,094)		406,315		253,188		632	(82,866)				536,543		473		537,016
Dividends										28,011							(735,013)				(707,002)		(740)		(707,742)
Other, net												2,467									2,467		(3,357)		(890)
Balance as of May 31, 2023	$	57	40	$	15	664,125	$	—	335	$	2,030,576	$	12,637,709	$	(6,127,121)	(33,364)	$	18,692,118	$	(1,900,923)	$	25,332,431	$	729,498	$	26,061,929

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents						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 May 31, 2022

(Unaudited)


	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares			Restricted Share Units		Additional Paid-in Capital		Treasury Shares			Retained 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 February 28, 2022	$	57	40	$	15	662,417	$	—	504	$	1,438,596	$	10,065,790	$	(5,297,349)	(29,035)	$	16,028,399	$	(1,675,485)	$	20,560,023	$	596,956	$	21,156,979
Net income																	1,786,075				1,786,075		33,241		1,819,316
Other comprehensive income (loss)																			(278,661)		(278,661)		(4,456)		(283,117)
Purchases of Class A shares												925		(972,171)		(3,102)					(971,246)		(925)		(972,171)
Share-based compensation expense										346,666		60,591									407,257				407,257
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares																					—				—
Issuances of Class A shares for employee share programs						1,568				(55,313)		405,704		147,118		569					497,509		465		497,974
Dividends										23,981							(637,116)				(613,135)		(650)		(613,785)
Other, net												1,272									1,272		(2,002)		(730)
Balance as of May 31, 2022	$	57	40	$	15	663,985	$	—	504	$	1,753,930	$	10,534,282	$	(6,122,402)	(31,568)	$	17,177,358	$	(1,954,146)	$	21,389,094	$	622,629	$	22,011,723

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents						Consolidated Financial Statements (In thousands of U.S. dollars and share amounts)
ACCENTURE FORM 10-Q						8

Consolidated Shareholders’ Equity Statement — (continued)

For the Nine Months Ended May 31, 2023

(Unaudited)


	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares			Restricted Share Units		Additional Paid-in Capital		Treasury Shares			Retained 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, 2022	$	57	40	$	15	664,561	$	—	501	$	2,091,382	$	10,679,180	$	(6,678,037)	(33,434)	$	18,203,842	$	(2,190,342)	$	22,106,097	$	640,991	$	22,747,088
Net income																	5,498,594				5,498,594		96,724		5,595,318
Other comprehensive income (loss)																			289,419		289,419		6,165		295,584
Purchases of Class A shares												3,021		(3,321,982)		(12,110)					(3,318,961)		(3,021)		(3,321,982)
Cancellation of treasury shares						(8,828)						(175,701)		2,595,281		8,828	(2,419,580)				—				—
Share-based compensation expense										1,407,869		122,165									1,530,034				1,530,034
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares									(166)			(3,868)									(3,868)				(3,868)
Issuances of Class A shares for employee share programs						8,392				(1,553,088)		2,006,131		1,277,617		3,352	(387,229)				1,343,431		1,206		1,344,637
Dividends										84,413							(2,203,509)				(2,119,096)		(2,235)		(2,121,331)
Other, net												6,781									6,781		(10,332)		(3,551)
Balance as of May 31, 2023	$	57	40	$	15	664,125	$	—	335	$	2,030,576	$	12,637,709	$	(6,127,121)	(33,364)	$	18,692,118	$	(1,900,923)	$	25,332,431	$	729,498	$	26,061,929

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents						Consolidated Financial Statements (In thousands of U.S. dollars and share amounts)
ACCENTURE FORM 10-Q						9

Consolidated Shareholders’ Equity Statement — (continued)

For the Nine Months Ended May 31, 2022

(Unaudited)


	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares			Restricted Share Units		Additional Paid-in Capital		Treasury Shares			Retained 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, 2021	$	57	40	$	15	656,591	$	—	513	$	1,750,784	$	8,617,838	$	(3,408,491)	(24,545)	$	13,988,748	$	(1,419,497)	$	19,529,454	$	567,660	$	20,097,114
Net income																	5,212,041				5,212,041		84,534		5,296,575
Other comprehensive income (loss)																			(534,649)		(534,649)		(10,032)		(544,681)
Purchases of Class A shares												3,388		(3,506,617)		(10,119)					(3,503,229)		(3,388)		(3,506,617)
Share-based compensation expense										1,210,825		108,730									1,319,555				1,319,555
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares									(9)			(4,274)									(4,274)				(4,274)
Issuances of Class A shares for employee share programs						7,394				(1,285,617)		1,795,507		792,706		3,096	(103,889)				1,198,707		1,144		1,199,851
Dividends										77,938							(1,919,542)				(1,841,604)		(1,972)		(1,843,576)
Other, net												13,093									13,093		(15,317)		(2,224)
Balance as of May 31, 2022	$	57	40	$	15	663,985	$	—	504	$	1,753,930	$	10,534,282	$	(6,122,402)	(31,568)	$	17,177,358	$	(1,954,146)	$	21,389,094	$	622,629	$	22,011,723

The accompanying Notes are an integral part of these Consolidated Financial Statements.


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

Consolidated Cash Flows Statements

For the Nine Months Ended May 31, 2023 and 2022

(Unaudited)


	May 31, 2023		May 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	5,595,318	$	5,296,575
Adjustments to reconcile Net income to Net cash provided by (used in) operating activities —
Depreciation, amortization and other	1,639,804		1,553,311
Share-based compensation expense	1,530,034		1,319,555


Deferred tax expense (benefit)	(136,237)		(27,784)
Other, net	(228,922)		(99,979)
Change in assets and liabilities, net of acquisitions —
Receivables and contract assets, current and non-current	(410,214)		(2,594,564)
Other current and non-current assets	(588,958)		(713,632)
Accounts payable	(242,633)		142,286
Deferred revenues, current and non-current	381,121		585,497
Accrued payroll and related benefits	(1,064,577)		489,743
Income taxes payable, current and non-current	57,745		360,262
Other current and non-current liabilities	(417,601)		(560,251)
Net cash provided by (used in) operating activities	6,114,880		5,751,019
CASH FLOWS FROM INVESTING ACTIVITIES:


Purchases of property and equipment	(347,878)		(540,947)
Purchases of businesses and investments, net of cash acquired	(1,334,007)		(2,212,388)
Proceeds from the sale of businesses and investments, net of cash transferred	418,113		(108,099)

Other investing, net	8,392		9,397
Net cash provided by (used in) investing activities	(1,255,380)		(2,852,037)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares	1,344,637		1,199,851
Purchases of shares	(3,325,850)		(3,510,891)
Proceeds from (repayments of) long-term debt, net	(364)		(11,530)
Cash dividends paid	(2,121,331)		(1,843,576)
Other financing, net	(62,117)		(43,468)
Net cash provided by (used in) financing activities	(4,165,025)		(4,209,614)
Effect of exchange rate changes on cash and cash equivalents	(48,862)		(153,974)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	645,613		(1,464,606)
CASH AND CASH EQUIVALENTS, beginning of period	7,889,833		8,168,174
CASH AND CASH EQUIVALENTS, end of period	$	8,535,446	$	6,703,568
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net	$	1,774,337	$	1,264,631

The accompanying Notes are an integral part of these Consolidated Financial Statements.


Table of Contents						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						11

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, 2022 included in our Annual Report on Form 10-K filed with the SEC on October 12, 2022.

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 and nine months ended May 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2023.

Allowance for Credit Losses—Client Receivables and Contract Assets

As of May 31, 2023 and August 31, 2022, the total allowance for credit losses recorded for client receivables and contract assets was $26,770 and $25,786, respectively. The change in the allowance is primarily due to immaterial write-offs and changes in gross client receivables and contract assets.

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:


	May 31, 2023		August 31, 2022
Equity method investments	$	22,816	$	164,164
Investments without readily determinable fair values	153,443		153,808
Total non-current investments	$	176,259	$	317,972

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.

As of August 31, 2022, our equity method investments consisted primarily of an investment in Duck Creek Technologies. On March 30, 2023, Duck Creek Technologies was acquired by Vista Equity Partners for $19.00 per share. As part of this transaction, we received proceeds of $400,355 and recorded a gain of $252,920 in Other income (expense), net during the third quarter of fiscal 2023.


Table of Contents						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						12

Depreciation and Amortization

As of May 31, 2023 and August 31, 2022, total accumulated depreciation was $2,766,344 and $2,490,187, respectively. See table below for a summary of depreciation on fixed assets, deferred transition amortization, intangible assets amortization and operating lease cost for the three and nine months ended May 31, 2023 and 2022, respectively.


	Three Months Ended				Nine Months Ended
	May 31, 2023		May 31, 2022		May 31, 2023		May 31, 2022
Depreciation	$	165,053	$	150,272	$	446,844	$	438,937
Amortization - Deferred transition	91,480		68,420		247,080		203,957
Amortization - Intangible assets	101,814		109,855		331,095		328,228
Operating lease cost	240,601		193,209		605,329		576,320
Other	2,151		2,430		9,456		5,869
Total depreciation, amortization and other	$	601,099	$	524,186	$	1,639,804	$	1,553,311

Business Optimization

During the second quarter of fiscal 2023, we initiated actions to streamline our operations, transform our non-billable corporate functions and consolidate our office space to reduce costs. We recorded $346,873 and $591,263 of business optimization costs during the three and nine months ended May 31, 2023, respectively, primarily for employee severance. Total business optimization costs by reportable operating segment are as follows:


	Three Months Ended		Nine Months Ended
	May 31, 2023			May 31, 2023

North America	$	96,349		$	273,329
Europe	166,463			206,840
Growth Markets	84,061			111,094
Total business optimization costs	$	346,873		$	591,263

We continue to expect to record total business optimization costs of approximately $1.5 billion related to these actions, with approximately $800 million in fiscal 2023 and $700 million in fiscal 2024. This consists of approximately $1.2 billion of employee severance and other personnel costs and $300 million of costs related to the consolidation of office space. The actual amount and timing of severance and other personnel costs are dependent in part upon local country consultation processes and regulations and may differ from our current expectations and estimates.


Table of Contents						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						13

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 $26 billion and $24 billion as of May 31, 2023 and August 31, 2022, 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 37% of our remaining performance obligations as of May 31, 2023 as revenue in fiscal 2023, an additional 35% in fiscal 2024, 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 and nine months ended May 31, 2023 and 2022.

Contract Balances

Deferred transition revenues were $687,098 and $712,715 as of May 31, 2023 and August 31, 2022, 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 $852,188 and $807,940 as of May 31, 2023 and August 31, 2022, 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 May 31, 2023		As of August 31, 2022
Receivables	$	11,005,863	$	10,484,211
Contract assets (current)	1,576,797		1,292,564
Receivables and contract assets, net of allowance (current)	12,582,660		11,776,775
Contract assets (non-current)	66,432		46,844
Deferred revenues (current)	5,101,692		4,478,048
Deferred revenues (non-current)	687,098		712,715

Changes in the contract asset and liability balances during the nine months ended May 31, 2023 were a result of normal business activity and not materially impacted by any other factors.

Revenues recognized during the three and nine months ended May 31, 2023 that were included in Deferred revenues as of February 28, 2023 and August 31, 2022 were $2.7 billion and $3.7 billion, respectively. Revenues recognized during the three and nine months ended May 31, 2022 that were included in Deferred revenues as of February 28, 2022 and August 31, 2021 were $2.5 billion and $3.5 billion, respectively.


Table of Contents						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						14

3. Earnings Per Share

Basic and diluted earnings per share are calculated as follows:


	Three Months Ended				Nine Months Ended
	May 31, 2023		May 31, 2022		May 31, 2023		May 31, 2022
Basic earnings per share
Net income attributable to Accenture plc	$	2,009,996	$	1,786,075	$	5,498,594	$	5,212,041
Basic weighted average Class A ordinary shares	631,535,162		632,749,442		630,826,230		632,969,487
Basic earnings per share	$	3.18	$	2.82	$	8.72	$	8.23
Diluted earnings per share
Net income attributable to Accenture plc	$	2,009,996	$	1,786,075	$	5,498,594	$	5,212,041
Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc. (1)	2,101		1,902		5,790		5,578
Net income for diluted earnings per share calculation	$	2,012,097	$	1,787,977	$	5,504,384	$	5,217,619
Basic weighted average Class A ordinary shares	631,535,162		632,749,442		630,826,230		632,969,487
Class A ordinary shares issuable upon redemption/exchange of noncontrolling interests (1)	660,083		673,775		664,324		677,363
Diluted effect of employee compensation related to Class A ordinary shares	6,505,805		7,513,927		6,830,076		9,834,622
Diluted effect of share purchase plans related to Class A ordinary shares	42,384		67,597		84,121		210,968
Diluted weighted average Class A ordinary shares	638,743,434		641,004,741		638,404,751		643,692,440
Diluted earnings per share	$	3.15	$	2.79	$	8.62	$	8.11

(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.


Table of Contents						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						15

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				Nine Months Ended
	May 31, 2023		May 31, 2022		May 31, 2023		May 31, 2022
Foreign currency translation
Beginning balance	$	(1,655,527)	$	(1,186,417)	$	(1,852,320)	$	(975,064)
Foreign currency translation	12,897		(235,827)		217,607		(455,075)
Income tax benefit (expense)	1,152		110		(1,479)		2,477
Portion attributable to noncontrolling interests	(797)		4,406		(6,083)		9,934
Foreign currency translation, net of tax	13,252		(231,311)		210,045		(442,664)
Ending balance	(1,642,275)		(1,417,728)		(1,642,275)		(1,417,728)

Defined benefit plans
Beginning balance	(250,552)		(563,385)		(348,771)		(559,958)



Reclassifications into net periodic pension and post-retirement expense	8,712		12,579		143,602		7,881
Income tax benefit (expense)	(1,984)		(2,276)		(38,552)		(1,009)
Portion attributable to noncontrolling interests	(6)		(11)		(109)		(7)
Defined benefit plans, net of tax	6,722		10,292		104,941		6,865
Ending balance	(243,830)		(553,093)		(243,830)		(553,093)

Cash flow hedges
Beginning balance	(38,191)		74,317		10,749		115,525
Unrealized gain (loss)	25,722		(37,978)		(66,994)		(31,924)
Reclassification adjustments into Cost of services	4,115		(27,449)		24,721		(78,142)
Income tax benefit (expense)	(6,440)		7,724		16,679		11,111
Portion attributable to noncontrolling interests	(24)		61		27		105
Cash flow hedges, net of tax	23,373		(57,642)		(25,567)		(98,850)
Ending balance (1)	(14,818)		16,675		(14,818)		16,675










Accumulated other comprehensive loss	$	(1,900,923)	$	(1,954,146)	$	(1,900,923)	$	(1,954,146)

(1)As of May 31, 2023, $1,761 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.


Table of Contents						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						16

5. Business Combinations

During the nine months ended May 31, 2023, we completed individually immaterial acquisitions for total consideration of $1,315,925, 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, 2022		Additions/ Adjustments		Foreign Currency Translation		May 31, 2023
North America	$	7,744,582	$	293,229	$	(16,741)	$	8,021,070
Europe	4,134,091		452,915		269,623		4,856,629
Growth Markets	1,254,620		366,380		(37,605)		1,583,395
Total	$	13,133,293	$	1,112,524	$	215,277	$	14,461,094

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, 2022						May 31, 2023
Intangible Asset Class	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer-related	$	2,498,001	$	(842,056)	$	1,655,945	$	2,667,461	$	(969,779)	$	1,697,682
Technology	283,251		(96,782)		186,469		287,727		(127,137)		160,590
Patents	126,950		(70,745)		56,205		124,293		(69,930)		54,363
Other	62,875		(30,686)		32,189		66,919		(40,471)		26,448
Total	$	2,971,077	$	(1,040,269)	$	1,930,808	$	3,146,400	$	(1,207,317)	$	1,939,083

Total amortization related to our intangible assets was $101,814 and $331,095 for the three and nine months ended May 31, 2023, respectively. Total amortization related to our intangible assets was $109,855 and $328,228 for the three and nine months ended May 31, 2022, respectively. Estimated future amortization related to intangible assets held as of May 31, 2023 is as follows:


Fiscal Year	Estimated Amortization
Remainder of 2023	$	107,772
2024	394,822
2025	361,876
2026	312,945
2027	250,085
Thereafter	511,583
Total	$	1,939,083


Table of Contents						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						17

7. Shareholders’ Equity

Cancellation of Treasury Shares

During the nine months ended May 31, 2023, we cancelled 8,828,496 Accenture plc Class A ordinary shares that were held as treasury shares and had an aggregate cost of $2,595,281. The effect of the cancellation of these treasury shares was recognized in Class A ordinary shares and Additional paid-in capital with the residual recorded in Retained earnings. There was no effect on total shareholders’ equity as a result of this cancellation.

Dividends

Our dividend activity during the nine months ended May 31, 2023 is as follows:


	Dividend Per Share			Accenture plc Class A Ordinary Shares					Accenture Canada Holdings Inc. Exchangeable Shares				Total Cash Outlay
Dividend Payment Date			Record Date		Cash Outlay			Record Date		Cash Outlay
November 15, 2022	$	1.12		October 13, 2022		$	704,938		October 11, 2022		$	629	$	705,567
February 15, 2023	1.12			January 12, 2023		707,156			January 10, 2023		866		708,022
May 15, 2023	1.12			April 13, 2023		707,002			April 11, 2023		740		707,742
Total Dividends						$	2,119,096				$	2,235	$	2,121,331

The payment of cash dividends includes the net effect of $84,413 of additional restricted stock units being issued as a part of our share plans, which resulted in 297,073 restricted share units being issued.

Subsequent Event

On June 21, 2023, the Board of Directors of Accenture plc declared a quarterly cash dividend of $1.12 per share on our Class A ordinary shares for shareholders of record at the close of business on July 13, 2023 payable on August 15, 2023.


Table of Contents						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						18

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 and nine months ended May 31, 2023 and 2022, 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 losses of $72,091 and $94,351 for the three and nine months ended May 31, 2023, respectively, and net losses of $31,285 and $67,812 for the three and nine months ended May 31, 2022, 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:


	May 31, 2023		August 31, 2022
Assets
Cash Flow Hedges
Other current assets	$	56,648	$	89,867
Other non-current assets	39,624		69,209
Other Derivatives
Other current assets	6,986		8,657
Total assets	$	103,258	$	167,733
Liabilities
Cash Flow Hedges
Other accrued liabilities	$	54,887	$	61,156
Other non-current liabilities	25,743		42,537
Other Derivatives
Other accrued liabilities	90,903		83,792
Total liabilities	$	171,533	$	187,485
Total fair value	$	(68,275)	$	(19,752)
Total notional value	$	13,373,535	$	11,095,604

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:


	May 31, 2023		August 31, 2022
Net derivative assets	$	46,349	$	140,073
Net derivative liabilities	114,624		159,825
Total fair value	$	(68,275)	$	(19,752)


Table of Contents						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						19

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 May 31, 2023 and 2022 were 22.2% and 27.1%, respectively. The lower effective tax rate for the three months ended May 31, 2023 was primarily due to lower tax expense from changes in the geographic distribution of earnings, the tax impact from an investment gain and higher benefits from adjustments to prior year tax liabilities. Our effective tax rates for the nine months ended May 31, 2023 and 2022 were 22.1% and 23.8%, respectively. The lower effective tax rate for the nine months ended May 31, 2023 was primarily due to lower tax expense from changes in the geographic distribution of earnings, higher benefits from adjustments to prior year tax liabilities and the tax impact from an investment gain, partially offset by lower tax benefits from share-based payments.

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 May 31, 2023 and August 31, 2022, our aggregate potential liability to our clients for expressly limited guarantees involving the performance of third parties was approximately $1,750,000 and $1,349,000, respectively, of which all but approximately $51,000 and $49,000, 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.

As of May 31, 2023 and August 31, 2022, we have issued or provided guarantees in the form of letters of credit and surety bonds of $1,239,648 and $1,116,298, respectively, the majority of which support certain contracts that require us to provide them as a guarantee of our performance. These guarantees are typically renewed annually and remain in place until the contractual obligations are satisfied. In general, we would only be liable for these guarantees in the event we defaulted in performing our obligations under each contract, the probability of which we believe is remote.

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, indemnification provisions, letters of credit and surety bonds, and believe that any potential payments would be immaterial to the Consolidated Financial Statements, as a whole.

Legal Contingencies

As of May 31, 2023, 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. On May 3, 2022, the court issued an order granting in part the plaintiffs’ motion for class certification, which we are appealing. Oral argument on the appeal was held on May 3, 2023. 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.


Table of Contents						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						20

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				Nine Months Ended
	May 31, 2023		May 31, 2022		May 31, 2023		May 31, 2022
Geographic Markets
North America	$	7,720,903	$	7,613,629	$	22,741,597	$	21,597,880
Europe	5,615,466		5,350,360		15,987,685		15,460,313
Growth Markets	3,228,216		3,194,814		9,397,263		9,112,456
Total Revenues	$	16,564,585	$	16,158,803	$	48,126,545	$	46,170,649
Industry Groups (1)
Communications, Media & Technology	$	2,880,187	$	3,222,525	$	8,745,192	$	9,118,790
Financial Services	3,138,181		3,079,418		9,104,444		8,869,296
Health & Public Service	3,266,347		2,917,028		9,289,961		8,333,915
Products	4,968,399		4,806,180		14,352,759		13,797,044
Resources	2,311,471		2,133,652		6,634,189		6,051,604
Total Revenues	$	16,564,585	$	16,158,803	$	48,126,545	$	46,170,649
Type of Work
Consulting	$	8,693,030	$	9,032,484	$	25,416,160	$	25,747,095
Managed Services (2)	7,871,555		7,126,319		22,710,385		20,423,554
Total Revenues	$	16,564,585	$	16,158,803	$	48,126,545	$	46,170,649

(1)Effective June 1, 2022, we revised the reporting of our industry groups for the movement of Aerospace & Defense from Communications, Media & Technology to Products. Prior period amounts have been reclassified to conform with the current period presentation.

(2)Previously referred to as our outsourcing business.


	Operating Income
	Three Months Ended				Nine Months Ended
	May 31, 2023		May 31, 2022		May 31, 2023		May 31, 2022
Geographic Markets
North America	$	1,241,245	$	1,379,828	$	3,374,986	$	3,715,155
Europe	631,547		693,512		1,895,180		1,969,997
Growth Markets	486,496		529,778		1,626,803		1,413,840
Total Operating Income	$	2,359,288	$	2,603,118	$	6,896,969	$	7,098,992


Table of Contents
ACCENTURE FORM 10-Q						Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21

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