Description of the Business and Summary of Significant Accounting Policies (Policies)	12 Months Ended
Dec. 31, 2021
Description of the Business and Summary of Significant Accounting Policies
Basis of presentation	Basis of presentation: The Consolidated Financial Statements consist of the accounts of Ingredion, including all subsidiaries. Intercompany accounts and transactions are eliminated in consolidation. The preparation of the accompanying Consolidated Financial Statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the value of purchase consideration, valuation of accounts receivable, inventories, certain investments, goodwill, intangible assets and other long-lived assets, legal contingencies and assumptions used in the calculation of income taxes and pension and other postretirement benefits, among others. These estimates and assumptions are based on our best estimates and judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which we believe to be reasonable under the circumstances. We will adjust such estimates and assumptions when facts and circumstances dictate. Foreign currency devaluations versus the U.S. dollar, corn price volatility, access to credit markets and adverse changes in the global economic environment have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods. Assets and liabilities of foreign subsidiaries, other than those whose functional currency is the U.S. dollar, are translated at current exchange rates with the related translation adjustments reported in equity as a component of accumulated other comprehensive loss (“AOCL”) and income statement accounts are translated at the average exchange rate during the period. However, significant non-recurring items related to specific events are recognized at the exchange rate on the date of each significant event. The U.S. dollar is the functional currency for Ingredion’s subsidiaries in Mexico and Argentina. If the U.S. dollar is the functional currency, we translate the subsidiary’s monetary assets and liabilities at current exchange rates with the related adjustment included in net income and non-monetary assets and liabilities at historical exchange rates with the related translation adjustments included in AOCL. Net Sales: Ingredion recognizes revenue under the core principle to depict the transfer of products to customers in an amount reflecting the consideration Ingredion expects to receive. To achieve that core principle, Ingredion applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied. Ingredion identifies customer purchase orders, which in some cases are governed by a master sales agreement, as the contracts with its customers. For each contract, Ingredion considers the transfer of products, each of which is distinct, to be the identified performance obligation. In determining the transaction price for the performance obligation, Ingredion evaluates whether the price is subject to adjustment to determine the consideration to which Ingredion expects to be entitled. The pricing model can be fixed or variable within the contract. The variable pricing model is based on historical commodity pricing and is determinable prior to completion of the performance obligation. Additionally, Ingredion has certain sales adjustments for volume incentive discounts and other discount arrangements that reduce the transaction price. The reduction of transaction price is estimated using the expected value method based on an analysis of historical volume incentives or discounts, over a period of time considered adequate to account for current pricing and business trends. Historically, actual volume incentives and discounts relative to those estimated and included when determining the transaction price have not materially differed. Volume incentives and discounts are accrued at the satisfaction of the performance obligation and accounted for in Accounts payable and Accrued liabilities in the Consolidated Balance Sheets. The product price as specified in the contract, net of any discounts, is considered the standalone selling price as it is an observable input that represents the price if we sold the product to a similar customer in similar circumstances. Payment is received shortly after the performance obligation is satisfied and thus, we do not recognize any significant financing components. Revenue is recognized when Ingredion’s performance obligation is satisfied and control is transferred to the customer, which occurs at a point in time, either upon delivery to an agreed upon location or to the customer. Further, in determining whether control has transferred, Ingredion considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. Shipping and handling activities related to contracts with customers represent fulfillment costs and are recorded in Cost of sales in the Consolidated Statements of Income. Taxes assessed by governmental authorities and collected from customers are accounted for on a net basis and excluded from net sales. We expense costs to obtain a contract when we incur the costs since most contracts are one year or less. These costs primarily include Ingredion’s internal sales force compensation. Under the terms of these programs, the compensation is generally earned, and the costs are recognized when we recognize the revenue. From time to time, Ingredion may enter into long-term contracts with its customers. Historically, the contracts entered into by Ingredion do not result in significant contract assets or liabilities. Any such arrangements are accounted for in Other assets or Accrued liabilities in the Consolidated Balance Sheets.
Revenue recognition	Net Sales: Ingredion recognizes revenue under the core principle to depict the transfer of products to customers in an amount reflecting the consideration Ingredion expects to receive. To achieve that core principle, Ingredion applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied. Ingredion identifies customer purchase orders, which in some cases are governed by a master sales agreement, as the contracts with its customers. For each contract, Ingredion considers the transfer of products, each of which is distinct, to be the identified performance obligation. In determining the transaction price for the performance obligation, Ingredion evaluates whether the price is subject to adjustment to determine the consideration to which Ingredion expects to be entitled. The pricing model can be fixed or variable within the contract. The variable pricing model is based on historical commodity pricing and is determinable prior to completion of the performance obligation. Additionally, Ingredion has certain sales adjustments for volume incentive discounts and other discount arrangements that reduce the transaction price. The reduction of transaction price is estimated using the expected value method based on an analysis of historical volume incentives or discounts, over a period of time considered adequate to account for current pricing and business trends. Historically, actual volume incentives and discounts relative to those estimated and included when determining the transaction price have not materially differed. Volume incentives and discounts are accrued at the satisfaction of the performance obligation and accounted for in Accounts payable and Accrued liabilities in the Consolidated Balance Sheets. The product price as specified in the contract, net of any discounts, is considered the standalone selling price as it is an observable input that represents the price if we sold the product to a similar customer in similar circumstances. Payment is received shortly after the performance obligation is satisfied and thus, we do not recognize any significant financing components. Revenue is recognized when Ingredion’s performance obligation is satisfied and control is transferred to the customer, which occurs at a point in time, either upon delivery to an agreed upon location or to the customer. Further, in determining whether control has transferred, Ingredion considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. Shipping and handling activities related to contracts with customers represent fulfillment costs and are recorded in Cost of sales in the Consolidated Statements of Income. Taxes assessed by governmental authorities and collected from customers are accounted for on a net basis and excluded from net sales. We expense costs to obtain a contract when we incur the costs since most contracts are one year or less. These costs primarily include Ingredion’s internal sales force compensation. Under the terms of these programs, the compensation is generally earned, and the costs are recognized when we recognize the revenue. From time to time, Ingredion may enter into long-term contracts with its customers. Historically, the contracts entered into by Ingredion do not result in significant contract assets or liabilities. Any such arrangements are accounted for in Other assets or Accrued liabilities in the Consolidated Balance Sheets.
Cash and cash equivalents	Cash and cash equivalents: Cash equivalents consist of all instruments purchased with an original maturity of three months or less and which have virtually no risk of loss in value.
Accounts receivable, net	Accounts receivable: Accounts receivable consist of trade and other receivables carried at approximate fair value, net of an allowance for credit losses. The allowance for credit losses is determined using our best estimate of expected credit losses based on historical experience and current forecasts of future economic conditions and we adjust this estimate over the life of the receivable as needed.
Inventories	Inventories: Inventories are stated at the lower of cost or net realizable value. Costs are predominantly determined using the weighted average method.
Long-term investments	Long-term investments: Ingredion may hold marketable securities and equity investments. Long-term investments are included in Other assets in the Consolidated Balance Sheets. Marketable securities are carried at fair value and we record changes in fair value to Other operating (income) in the Consolidated Statements of Income. Equity investments in companies for which Ingredion does not have the ability to exercise significant influence are accounted for at fair value, with changes in fair value recorded in Other non-operating (income) expense in the Consolidated Statements of Income. Equity securities without readily determinable fair values are carried at cost, less impairments, if any, and adjusted for observable price changes for the identical or a similar investment of the same issuer. We perform a qualitative impairment assessment to determine if such investments are impaired. The qualitative assessment considers all available information, including declines in the financial performance of the issuing entity, the issuing entity’s operating environment and general market conditions. Impairments of equity securities without readily determinable fair value are recorded in Other non-operating (income) expense in the Consolidated Statements of Income. Equity investments in companies for which Ingredion has the ability to exercise significant influence, but not control, are accounted for using the equity method of accounting. Ingredion’s share of the earnings or losses as reported by equity method investees, are recognized in Other operating (income) in the Consolidated Statements of Income. Each reporting period, Ingredion evaluates declines in the fair value of equity method investments below carrying value to determine if they are other-than-temporary and if so, Ingredion writes down the investment to its estimated fair value. Impairments are recognized in Restructuring/impairment charges and related adjustments in the Consolidated Statements of Income. Leases: Ingredion determines if an arrangement contains a lease, as well as its classification as an operating lease or finance lease, at the inception of the agreement. Lease assets represent Ingredion’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. As most of Ingredion’s leases do not provide an implicit rate, Ingredion uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease asset value includes in our calculation any prepaid lease payments made and any lease incentives received from the arrangement as a reduction of the asset. Ingredion’s lease terms may include options to extend or terminate the lease and the impact of these options are included in the lease liability and lease asset calculations when the exercise of the option is at Ingredion’s sole discretion and it is reasonably certain that we will exercise that option. Ingredion will not separate lease and non-lease components for its leases when it is impracticable to separate them, such as leases with variable payment arrangements. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. Ingredion has operating leases for certain rail cars, office space, warehouses and machinery and equipment. The commencement date used for the calculation of the lease obligations recorded is the latter of January 1, 2019 or the lease start date. Certain leases have options to extend the life of the lease, which are included in the liability calculation when the option is at the sole discretion of Ingredion and it is reasonably certain that Ingredion will exercise the option. Ingredion has certain leases that have variable payments based solely on output or usage of the leased asset. These variable operating lease assets are excluded from Ingredion’s Consolidated Balance Sheets presentation and expensed as incurred. Lease expense is recognized on a straight-line basis over the lease term.
Leases	Leases: Ingredion determines if an arrangement contains a lease, as well as its classification as an operating lease or finance lease, at the inception of the agreement. Lease assets represent Ingredion’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. As most of Ingredion’s leases do not provide an implicit rate, Ingredion uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease asset value includes in our calculation any prepaid lease payments made and any lease incentives received from the arrangement as a reduction of the asset. Ingredion’s lease terms may include options to extend or terminate the lease and the impact of these options are included in the lease liability and lease asset calculations when the exercise of the option is at Ingredion’s sole discretion and it is reasonably certain that we will exercise that option. Ingredion will not separate lease and non-lease components for its leases when it is impracticable to separate them, such as leases with variable payment arrangements. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. Ingredion has operating leases for certain rail cars, office space, warehouses and machinery and equipment. The commencement date used for the calculation of the lease obligations recorded is the latter of January 1, 2019 or the lease start date. Certain leases have options to extend the life of the lease, which are included in the liability calculation when the option is at the sole discretion of Ingredion and it is reasonably certain that Ingredion will exercise the option. Ingredion has certain leases that have variable payments based solely on output or usage of the leased asset. These variable operating lease assets are excluded from Ingredion’s Consolidated Balance Sheets presentation and expensed as incurred. Lease expense is recognized on a straight-line basis over the lease term.
Property, plant and equipment and depreciation	Property, plant and equipment and definite-lived intangible assets: Property, plant and equipment (“PP&E”) is stated at cost less accumulated depreciation and definite-lived intangible assets are stated at cost less accumulated amortization. For PP&E, depreciation is generally computed on the straight-line basis over the estimated useful lives of depreciable assets, which range from 25 to 50 years for buildings and from two to 25 years for all other assets. Costs for mechanical stores represent costs for spare parts used in the production process that are capitalized in PP&E as part of machinery and equipment until they are utilized in the manufacturing process and expensed as a period cost. Where permitted by law, accelerated depreciation methods are used for tax purposes. For definite-lived intangible assets, we recognize the cost of these amortizable assets in operations over their estimated useful life, which range from two to 30 years. Ingredion reviews the recoverability of the net book value of PP&E and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. If this review indicates that the carrying values of the asset group will not be recovered, the carrying values are reduced to fair value and an impairment loss is recognized. The impairment analysis for long-lived assets occurs before the goodwill impairment assessment described below.
Intangible assets	Indefinite-lived intangible assets and Goodwill: We have certain indefinite-lived intangible assets in the form of tradenames and trademarks. Our methodology for allocating the purchase price of acquisitions is based on established valuation techniques that reflect the consideration of a number of factors, including valuations performed by third-party appraisers when appropriate. Goodwill represents the excess of the cost of an acquired entity over the fair value assigned to identifiable assets acquired and liabilities assumed. Ingredion assesses indefinite-lived intangible assets and goodwill for impairment annually (or more frequently if impairment indicators arise), which we perform as of July 1 of each year. In testing indefinite-lived intangible assets for impairment, Ingredion first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is impaired. After assessing the qualitative factors, if Ingredion determines that it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is greater than its carrying amount, then we are not required to compute the fair value of the indefinite-lived intangible asset. If the qualitative assessment leads Ingredion to conclude otherwise, then we are required to determine the fair value of the indefinite-lived intangible assets and perform a quantitative impairment test. In performing the qualitative analysis, Ingredion considers various factors including net sales derived from these intangibles and certain market and industry conditions. Based on the results of the annual assessment, Ingredion concluded that as of July 1, 2021, there were no impairments in our indefinite-lived intangible assets. In testing goodwill for impairment, Ingredion first assesses qualitative factors in determining whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. After assessing the qualitative factors, if Ingredion determines that it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, then Ingredion does not perform an impairment test. If Ingredion concludes otherwise, then Ingredion performs an impairment test that compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of its net assets, goodwill is not considered impaired, and no further testing is required. If the carrying value of the net assets exceeds the fair value of the reporting unit, then an impairment exists for the difference between the fair value and carrying value of the reporting unit. This difference is not to exceed the goodwill recorded at the reporting unit. Based on the results of the annual assessment, Ingredion concluded that as of July 1, 2021, there were no impairments in our reporting units.
Hedging instruments	Hedging instruments: Derivative financial instruments used by Ingredion consist of commodity futures and option contracts, forward currency contracts and options, interest rate swap agreements and Treasury lock agreements (“T-Locks”). When Ingredion enters a derivative contract, we designate the derivative as a hedge of variable cash flows to be paid related to certain forecasted transactions (“a cash flow hedge”), as a hedge of the fair value of certain firm commitments (“a fair value hedge”), or as a non-designated hedging instrument. This process includes linking all derivatives that are designated as cash flow or fair value hedges to specific assets and liabilities on the Consolidated Balance Sheets, or to specific firm commitments or forecasted transactions. For all hedging relationships, Ingredion documents the hedging relationships and its risk-management objective and strategy for undertaking the hedge transactions, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed and a description of the method of measuring ineffectiveness. Ingredion also formally assesses both, at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows or fair values of hedged items. Unrealized gains and losses associated with marking cash flow hedging contracts to market (fair value) are recorded as a component of other comprehensive loss (“OCL”). Ingredion discontinues hedge accounting prospectively when it is unlikely that a forecasted transaction will occur or when we determine that the designation of the derivative as a hedging instrument is no longer appropriate since the derivative is no longer effective in offsetting changes in the cash flows or fair value of the originally intended hedged transaction. When hedge accounting is discontinued, Ingredion continues to carry the derivative on the Consolidated Balance Sheets at its fair value and any accumulated gains and losses that were included in AOCL in the period a hedge was determined to be ineffective, as well as future gains and losses of the derivative, are recognized in earnings in the same line item affected by the originally intended hedged transaction.
Pension and Other Postemployment Benefits	Pension and other postemployment benefits: All U.S. pension and postemployment benefit plans and most non-U.S. pension and postemployment benefit plans value the vested benefit obligation based on the actuarial present value of the vested benefits to which employees are currently entitled based on their expected date of separation or retirement. For defined benefit plans, the service cost component of net periodic benefit cost is presented within either Cost of sales or operating expenses on the Consolidated Statements of Income. The interest cost, expected return on plan assets, amortization of actuarial loss, amortization of prior service credit and settlement loss components of net periodic benefit cost are presented as Other non-operating (income) expense on the Consolidated Statements of Income. Actuarial gains and losses in excess of 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets are classified in AOCL, along with the related tax impact, and recognized as a component of net periodic benefit cost over the average remaining service period of a plan’s active employees for active defined benefit pension plans and over the average remaining life of a plan’s active employees for frozen defined benefit pension plans.
Share-based compensation	Share-based compensation: Ingredion has a stock incentive plan that provides for share-based employee compensation, including the granting of stock options, shares of restricted stock, restricted stock units and performance shares to certain key employees. Compensation expense is generally recognized in the Consolidated Statements of Income on a straight-line basis for all awards over the employee’s vesting period or over a one-year required service period for certain retirement-eligible, executive level employees. Ingredion estimates a forfeiture rate at the time of certain grants and updates the estimate throughout the vesting of certain awards within the amount of compensation costs recognized in each period.
Earnings per common share	Earnings per common share: Basic earnings per common share (“EPS”) is computed by dividing net income attributable to Ingredion by the weighted average number of shares outstanding. Diluted EPS is calculated using the treasury stock method, computed by dividing net income attributable to Ingredion by the weighted average number of shares outstanding, including the dilutive effect of outstanding stock options and other instruments associated with long-term incentive compensation plans.
Risks and uncertainties	Risks and uncertainties: Ingredion operates domestically and internationally. In each country, the business and assets are subject to varying degrees of risk and uncertainty. Ingredion insures its business and assets in each country against insurable risks in a manner that it deems appropriate. Because of this geographic dispersion, Ingredion believes that a loss from non-insurable events in any one country would not have a material adverse effect on Ingredion’s operations as a whole. Additionally, Ingredion believes there is no significant concentration of risk with any single customer or supplier whose failure or non-performance would materially affect Ingredion’s results.
Recently adopted accounting standards and New accounting standards	New Accounting Standards In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the effect of adoption of ASU No. 2020-04 on our financial position and results of operations.

Description of the Business and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Description of the Business and Summary of Significant Accounting Policies

Basis of presentation: The Consolidated Financial Statements consist of the accounts of Ingredion, including all subsidiaries. Intercompany accounts and transactions are eliminated in consolidation.

The preparation of the accompanying Consolidated Financial Statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the value of purchase consideration, valuation of accounts receivable, inventories, certain investments, goodwill, intangible assets and other long-lived assets, legal contingencies and assumptions used in the calculation of income taxes and pension and other postretirement benefits, among others. These estimates and assumptions are based on our best estimates and judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which we believe to be reasonable under the circumstances. We will adjust such estimates and assumptions when facts and circumstances dictate. Foreign currency devaluations versus the U.S. dollar, corn price volatility, access to credit markets and adverse changes in the global economic environment have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods.

Assets and liabilities of foreign subsidiaries, other than those whose functional currency is the U.S. dollar, are translated at current exchange rates with the related translation adjustments reported in equity as a component of accumulated other comprehensive loss (“AOCL”) and income statement accounts are translated at the average exchange rate during the period. However, significant non-recurring items related to specific events are recognized at the exchange rate on the date of each significant event. The U.S. dollar is the functional currency for Ingredion’s subsidiaries in Mexico and Argentina. If the U.S. dollar is the functional currency, we translate the subsidiary’s monetary assets and liabilities at current exchange rates with the related adjustment included in net income and non-monetary assets and liabilities at historical exchange rates with the related translation adjustments included in AOCL.

Net Sales: Ingredion recognizes revenue under the core principle to depict the transfer of products to customers in an amount reflecting the consideration Ingredion expects to receive. To achieve that core principle, Ingredion applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied.

Ingredion identifies customer purchase orders, which in some cases are governed by a master sales agreement, as the contracts with its customers. For each contract, Ingredion considers the transfer of products, each of which is distinct, to be the identified performance obligation. In determining the transaction price for the performance obligation, Ingredion evaluates whether the price is subject to adjustment to determine the consideration to which Ingredion expects to be entitled. The pricing model can be fixed or variable within the contract. The variable pricing model is based on historical commodity pricing and is determinable prior to completion of the performance obligation. Additionally, Ingredion has certain sales adjustments for volume incentive discounts and other discount arrangements that reduce the transaction price. The reduction of transaction price is estimated using the expected value method based on an analysis of historical volume incentives or discounts, over a period of time considered adequate to account for current pricing and business trends. Historically, actual volume incentives and discounts relative to those estimated and included when determining the transaction price have not materially differed. Volume incentives and discounts are accrued at the satisfaction of the performance obligation and accounted for in Accounts payable and Accrued liabilities in the

Consolidated Balance Sheets. The product price as specified in the contract, net of any discounts, is considered the standalone selling price as it is an observable input that represents the price if we sold the product to a similar customer in similar circumstances. Payment is received shortly after the performance obligation is satisfied and thus, we do not recognize any significant financing components.

Revenue is recognized when Ingredion’s performance obligation is satisfied and control is transferred to the customer, which occurs at a point in time, either upon delivery to an agreed upon location or to the customer. Further, in determining whether control has transferred, Ingredion considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer.

Shipping and handling activities related to contracts with customers represent fulfillment costs and are recorded in Cost of sales in the Consolidated Statements of Income. Taxes assessed by governmental authorities and collected from customers are accounted for on a net basis and excluded from net sales. We expense costs to obtain a contract when we incur the costs since most contracts are one year or less. These costs primarily include Ingredion’s internal sales force compensation. Under the terms of these programs, the compensation is generally earned, and the costs are recognized when we recognize the revenue.

From time to time, Ingredion may enter into long-term contracts with its customers. Historically, the contracts entered into by Ingredion do not result in significant contract assets or liabilities. Any such arrangements are accounted for in Other assets or Accrued liabilities in the Consolidated Balance Sheets.

Revenue recognition

Cash and cash equivalents

Cash and cash equivalents: Cash equivalents consist of all instruments purchased with an original maturity of three months or less and which have virtually no risk of loss in value.

Accounts receivable, net

Accounts receivable: Accounts receivable consist of trade and other receivables carried at approximate fair value, net of an allowance for credit losses. The allowance for credit losses is determined using our best estimate of expected credit losses based on historical experience and current forecasts of future economic conditions and we adjust this estimate over the life of the receivable as needed.

Inventories

Inventories: Inventories are stated at the lower of cost or net realizable value. Costs are predominantly determined using the weighted average method.

Long-term investments

Long-term investments: Ingredion may hold marketable securities and equity investments. Long-term investments are included in Other assets in the Consolidated Balance Sheets. Marketable securities are carried at fair value and we record changes in fair value to Other operating (income) in the Consolidated Statements of Income.

Equity investments in companies for which Ingredion does not have the ability to exercise significant influence are accounted for at fair value, with changes in fair value recorded in Other non-operating (income) expense in the Consolidated Statements of Income. Equity securities without readily determinable fair values are carried at cost, less impairments, if any, and adjusted for observable price changes for the identical or a similar investment of the same issuer. We perform a qualitative impairment assessment to determine if such investments are impaired. The qualitative assessment considers all available information, including declines in the financial performance of the issuing entity, the issuing entity’s operating environment and general market conditions. Impairments of equity securities without readily determinable fair value are recorded in Other non-operating (income) expense in the Consolidated Statements of Income.

Equity investments in companies for which Ingredion has the ability to exercise significant influence, but not control, are accounted for using the equity method of accounting. Ingredion’s share of the earnings or losses as reported by equity method investees, are recognized in Other operating (income) in the Consolidated Statements of Income. Each reporting period, Ingredion evaluates declines in the fair value of equity method investments below carrying value to determine if they are other-than-temporary and if so, Ingredion writes down the investment to its estimated fair value. Impairments are recognized in Restructuring/impairment charges and related adjustments in the Consolidated Statements of Income.

Leases: Ingredion determines if an arrangement contains a lease, as well as its classification as an operating lease or finance lease, at the inception of the agreement. Lease assets represent Ingredion’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments

over the lease term. As most of Ingredion’s leases do not provide an implicit rate, Ingredion uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease asset value includes in our calculation any prepaid lease payments made and any lease incentives received from the arrangement as a reduction of the asset. Ingredion’s lease terms may include options to extend or terminate the lease and the impact of these options are included in the lease liability and lease asset calculations when the exercise of the option is at Ingredion’s sole discretion and it is reasonably certain that we will exercise that option. Ingredion will not separate lease and non-lease components for its leases when it is impracticable to separate them, such as leases with variable payment arrangements. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets.

Ingredion has operating leases for certain rail cars, office space, warehouses and machinery and equipment. The commencement date used for the calculation of the lease obligations recorded is the latter of January 1, 2019 or the lease start date. Certain leases have options to extend the life of the lease, which are included in the liability calculation when the option is at the sole discretion of Ingredion and it is reasonably certain that Ingredion will exercise the option. Ingredion has certain leases that have variable payments based solely on output or usage of the leased asset. These variable operating lease assets are excluded from Ingredion’s Consolidated Balance Sheets presentation and expensed as incurred. Lease expense is recognized on a straight-line basis over the lease term.

Leases

Property, plant and equipment and depreciation

Property, plant and equipment and definite-lived intangible assets: Property, plant and equipment (“PP&E”) is stated at cost less accumulated depreciation and definite-lived intangible assets are stated at cost less accumulated amortization. For PP&E, depreciation is generally computed on the straight-line basis over the estimated useful lives of depreciable assets, which range from 25 to 50 years for buildings and from two to 25 years for all other assets. Costs for mechanical stores represent costs for spare parts used in the production process that are capitalized in PP&E as part of machinery and equipment until they are utilized in the manufacturing process and expensed as a period cost. Where permitted by law, accelerated depreciation methods are used for tax purposes. For definite-lived intangible assets, we recognize the cost of these amortizable assets in operations over their estimated useful life, which range from two to 30 years. Ingredion reviews the recoverability of the net book value of PP&E and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. If this review indicates that the carrying values of the asset group will not be recovered, the carrying values are reduced to fair value and an impairment loss is recognized. The impairment analysis for long-lived assets occurs before the goodwill impairment assessment described below.

Intangible assets

Indefinite-lived intangible assets and Goodwill: We have certain indefinite-lived intangible assets in the form of tradenames and trademarks. Our methodology for allocating the purchase price of acquisitions is based on established valuation techniques that reflect the consideration of a number of factors, including valuations performed by third-party appraisers when appropriate. Goodwill represents the excess of the cost of an acquired entity over the fair value assigned to identifiable assets acquired and liabilities assumed. Ingredion assesses indefinite-lived intangible assets and goodwill for impairment annually (or more frequently if impairment indicators arise), which we perform as of July 1 of each year.

In testing indefinite-lived intangible assets for impairment, Ingredion first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is impaired. After assessing the qualitative factors, if Ingredion determines that it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is greater than its carrying amount, then we are not required to compute the fair value of the indefinite-lived intangible asset. If the qualitative assessment leads Ingredion to conclude otherwise, then we are required to determine the fair value of the indefinite-lived intangible assets and perform a quantitative impairment test. In performing the qualitative analysis, Ingredion considers various factors including net sales derived from these intangibles and certain market and industry conditions. Based on the results of the annual assessment, Ingredion concluded that as of July 1, 2021, there were no impairments in our indefinite-lived intangible assets.

In testing goodwill for impairment, Ingredion first assesses qualitative factors in determining whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. After assessing the qualitative factors, if Ingredion determines that it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, then Ingredion does not perform an impairment test. If Ingredion concludes otherwise, then Ingredion performs an impairment test that compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of its net assets, goodwill is not considered impaired, and no further testing is required. If the carrying value of the net assets exceeds the fair value of the reporting unit, then an impairment exists for the difference between the fair value and carrying value of the reporting unit. This difference is not to exceed the

goodwill recorded at the reporting unit. Based on the results of the annual assessment, Ingredion concluded that as of July 1, 2021, there were no impairments in our reporting units.

Hedging instruments

Hedging instruments: Derivative financial instruments used by Ingredion consist of commodity futures and option contracts, forward currency contracts and options, interest rate swap agreements and Treasury lock agreements (“T-Locks”).

When Ingredion enters a derivative contract, we designate the derivative as a hedge of variable cash flows to be paid related to certain forecasted transactions (“a cash flow hedge”), as a hedge of the fair value of certain firm commitments (“a fair value hedge”), or as a non-designated hedging instrument. This process includes linking all derivatives that are designated as cash flow or fair value hedges to specific assets and liabilities on the Consolidated Balance Sheets, or to specific firm commitments or forecasted transactions. For all hedging relationships, Ingredion documents the hedging relationships and its risk-management objective and strategy for undertaking the hedge transactions, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed and a description of the method of measuring ineffectiveness. Ingredion also formally assesses both, at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows or fair values of hedged items. Unrealized gains and losses associated with marking cash flow hedging contracts to market (fair value) are recorded as a component of other comprehensive loss (“OCL”).

Ingredion discontinues hedge accounting prospectively when it is unlikely that a forecasted transaction will occur or when we determine that the designation of the derivative as a hedging instrument is no longer appropriate since the derivative is no longer effective in offsetting changes in the cash flows or fair value of the originally intended hedged transaction. When hedge accounting is discontinued, Ingredion continues to carry the derivative on the Consolidated Balance Sheets at its fair value and any accumulated gains and losses that were included in AOCL in the period a hedge was determined to be ineffective, as well as future gains and losses of the derivative, are recognized in earnings in the same line item affected by the originally intended hedged transaction.

Pension and Other Postemployment Benefits

Pension and other postemployment benefits: All U.S. pension and postemployment benefit plans and most non-U.S. pension and postemployment benefit plans value the vested benefit obligation based on the actuarial present value of the vested benefits to which employees are currently entitled based on their expected date of separation or retirement.

For defined benefit plans, the service cost component of net periodic benefit cost is presented within either Cost of sales or operating expenses on the Consolidated Statements of Income. The interest cost, expected return on plan assets, amortization of actuarial loss, amortization of prior service credit and settlement loss components of net periodic benefit cost are presented as Other non-operating (income) expense on the Consolidated Statements of Income.

Actuarial gains and losses in excess of 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets are classified in AOCL, along with the related tax impact, and recognized as a component of net periodic benefit cost over the average remaining service period of a plan’s active employees for active defined benefit pension plans and over the average remaining life of a plan’s active employees for frozen defined benefit pension plans.

Share-based compensation

Share-based compensation: Ingredion has a stock incentive plan that provides for share-based employee compensation, including the granting of stock options, shares of restricted stock, restricted stock units and performance shares to certain key employees. Compensation expense is generally recognized in the Consolidated Statements of Income on a straight-line basis for all awards over the employee’s vesting period or over a one-year required service period for certain retirement-eligible, executive level employees. Ingredion estimates a forfeiture rate at the time of certain grants and updates the estimate throughout the vesting of certain awards within the amount of compensation costs recognized in each period.

Earnings per common share

Earnings per common share: Basic earnings per common share (“EPS”) is computed by dividing net income attributable to Ingredion by the weighted average number of shares outstanding. Diluted EPS is calculated using the treasury stock method, computed by dividing net income attributable to Ingredion by the weighted average number of shares outstanding, including the dilutive effect of outstanding stock options and other instruments associated with long-term incentive compensation plans.

Risks and uncertainties

Risks and uncertainties: Ingredion operates domestically and internationally. In each country, the business and assets are subject to varying degrees of risk and uncertainty. Ingredion insures its business and assets in each country against insurable risks in a manner that it deems appropriate. Because of this geographic dispersion, Ingredion believes that a loss from non-insurable events in any one country would not have a material adverse effect on Ingredion’s operations as a whole. Additionally, Ingredion believes there is no significant concentration of risk with any single customer or supplier whose failure or non-performance would materially affect Ingredion’s results.

Recently adopted accounting standards and New accounting standards

New Accounting Standards

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the effect of adoption of ASU No. 2020-04 on our financial position and results of operations.