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Nature of Operations and Summary of Significant Accounting Policies | 3 Months Ended
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Mar. 31, 2026
Accounting Policies [Abstract] |
Nature of Operations and Summary of Significant Accounting Policies | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations International Flavors & Fragrances Inc. and its subsidiaries (the “Registrant,” “IFF,” the “Company,” “we,” “us” and “our”) is a leading creator and manufacturer of products for application in food, beverage, health & biosciences, scent (and pharmaceuticals, until the sale of our Pharma Solutions disposal group in May 2025), as well as complementary adjacent products, including natural health ingredients, all of which are used in a wide variety of consumer and end-use products. Our products are sold principally to manufacturers of dairy, meat, beverages, snacks, savory, sweet, baked goods, grain processors and other foods, personal care products, soaps and detergents, cleaning products, perfumes, dietary supplements, food protection, infant, elderly and animal nutrition, functional food, bio-fuel, pharmaceutical and oral care products. As a result, we hold global leadership positions in the Food & Beverage, Home & Personal Care and Health & Wellness markets, and across key Tastes, Textures, Scents, Nutrition, Enzymes, Cultures, Soy Proteins, and Probiotics categories, among others. Basis of Presentation The accompanying interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the related notes included in our 2025 Annual Report on Form 10-K (“2025 Form 10-K”), filed on February 27, 2026 with the Securities and Exchange Commission (“SEC”). The interim Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial information and with the rules and regulations for reporting on Form 10-Q, and are unaudited. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP in the United States of America have been condensed or omitted, if not materially different from the 2025 Form 10-K. The year-end balance sheet data included in this Form 10-Q was derived from the audited financial statements. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim Consolidated Financial Statements, have been made. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the periods reported. The Company uses estimates to assess expected credit losses on its financial assets, sales discounts, rebates and allowances, the recoverability of inventory, the realization of deferred tax assets, annual effective tax rate, the recoverability of long-lived assets, useful lives and impairment of tangible and intangible assets including goodwill, restructuring reserves, pension and postretirement benefit costs, fair value of equity compensation, and the amount of exposure from potential loss contingencies, among others. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the Combined Financial Statements in the period they are determined to be necessary. Inputs into the Company’s judgments and estimates take into account the ongoing global current events and macroeconomic environment on the Company’s critical and significant accounting estimates. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents reported in the Company’s balance sheet as of March 31, 2026, December 31, 2025, March 31, 2025 and December 31, 2024 were as follows:
(DOLLARS IN MILLIONS) | March 31, 2026 |  | December 31, 2025 |  | March 31, 2025 |  | December 31, 2024
Current assets |  |  |  |  |  |  |
Cash and cash equivalents | $ | 562 |  |  | $ | 590 |  |  | $ | 613 |  |  | $ | 469 |
Cash and cash equivalents included in Assets held for sale | — |  |  | — |  |  | 37 |  |  | 2 |
Cash and cash equivalents | $ | 562 |  |  | $ | 590 |  |  | $ | 650 |  |  | $ | 471 |
The Company had no restricted cash as of March 31, 2026 and December 31, 2025. Accounts Receivable The Company has various factoring agreements globally under which it can factor up to approximately $533 million of its trade receivables (“Company’s own factoring agreements”). In addition, the Company utilizes factoring agreements sponsored by certain customers. Under all of the arrangements, the Company sells the trade receivables on a non-recourse basis to unrelated financial institutions and accounts for the transactions as sales of receivables. The applicable receivables are removed from the Company’s Consolidated Balance Sheets when the cash proceeds are received by the Company. The Company sold a total of approximately $516 million and $413 million of receivables under the Company’s own factoring agreements and customer sponsored factoring agreements for the three months ended March 31, 2026 and 2025, respectively. The cost of participating in these programs was approximately $6 million for each of the three months ended March 31, 2026 and 2025. These costs are included as a component of interest expense. Although the Company’s own factoring agreements are non-recourse to the Company, the Company has continued responsibility to collect receivables on behalf of the sponsoring banks. Under these agreements, the Company sold approximately $402 million and $196 million of receivables for the three months ended March 31, 2026 and 2025, respectively. The outstanding principal amounts of receivables under the Company’s own factoring agreements amounted to approximately $394 million and $361 million as of March 31, 2026 and December 31, 2025, respectively. The proceeds from the sales of receivables are inc luded in Net cash provided by operating activities in the Consolidated Statements of Cash Flows. Expected Credit Losses As of March 31, 2026, the Company reported $1.830 billion of trade receivables, net of allowances of $26 million. Based on the aging analysis as of March 31, 2026, less than 1% of the Company’s accounts receivable were past due by over 365 days based on the payment terms of the invoice. The following is a roll-forward of the Company’s allowances for bad debts for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31,
(DOLLARS IN MILLIONS) | 2026 | 2025
Balance at January 1 | $ | 27 |  | $ | 26 |
Allowances for bad debt expense | 1 |  | 1 |
Write-offs | (2) |  | — |
Foreign exchange | — |  | 1 |
Balance at March 31 | $ | 26 |  | $ | 28 |
Inventories Inventories are stated at the lower of cost (on a weighted-average basis) or net realizable value. The Company’s inventories consisted of the following:
(DOLLARS IN MILLIONS) | March 31, 2026 |  | December 31, 2025
Raw materials | $ | 737 |  |  | $ | 731 |
Work in process | 462 |  |  | 454 |
Finished goods | 1,051 |  |  | 1,060 |
Total | $ | 2,250 |  |  | $ | 2,245 |
Recent Accounting Pronouncements In December 2025, the FASB issued ASU 2025-12 “Codification Improvements” to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. The amendments make the Codification easier to understand and apply. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company does not expect this guidance to have a significant impact on its Consolidated Financial Statements and related disclosures. In December 2025, the FASB issued ASU 2025-11 to amend the guidance in “Interim Reporting” (Topic 270). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. The Company does not expect any significant impact on its financial condition or results of operations upon adoption. In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832)”. The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income. The amendments introduce two permitted approaches for asset-related grants: a deferred income approach or a cost accumulation approach. The guidance is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. The Company is currently evaluating the impact of this guidance on its Consolidated Financial Statements and related disclosures. In November 2025, the FASB issued ASU 2025-09 to amend the guidance in “Derivatives and Hedging” (Topic 815). The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact of this guidance on its Consolidated Financial Statements and related disclosures. In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal use Software (Subtopic 350-40): Targeted improvements to the Accounting for Internal-use Software”. The ASU was issued to modernize the accounting for internal-use software by eliminating the accounting consideration of software project development stages and clarifying the threshold applied to begin capitalizing costs. This guidance is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. Public business entities are permitted to adopt the ASU prospectively or retrospectively. The Company is currently evaluating the impact of this guidance on its Consolidated Financial Statements and related disclosures. In July 2025, the FASB issued ASU 2025-05, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which provides a practical expedient to measure credit losses on accounts receivable and contract assets. This guidance is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company has adopted the ASU prospectively and has determined that there is no material impact of this guidance on its Consolidated Financial Statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, and in January 2025, issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). The ASU was issued to improve the disclosures about a public business entity’s expenses, primarily through disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Public business entities are permitted to adopt the ASU prospectively or retrospectively. The Company is currently evaluating the impact that this guidance will have on its Consolidated Financial Statements and related disclosures.

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