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Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2022
Summary of Significant Accounting Policies |
Summary of Significant Accounting Policies | Note 1 − Su mmary of Significant Accounting Policies Operations of Seaboard Corporation and its Subsidiaries Seaboard Corporation and its subsidiaries (collectively, “Seaboard”) together comprise a diversified group of companies that operate worldwide in agricultural and ocean transport businesses. Seaboard is primarily engaged in hog production and pork processing in the United States (“U.S.”); commodity trading and grain processing in Africa and South America; cargo shipping services in the U.S., Caribbean and Central and South America; sugar and alcohol production in Argentina; and electric power generation in the Dominican Republic. Seaboard also has an equity method investment in Butterball, LLC (“Butterball”), a producer and processor of turkey products. Seaboard’s outstanding common stock is closely held, with approximately 77% collectively owned by Seaboard Flour LLC and SFC Preferred, LLC. Principles of Consolidation The consolidated financial statements include the accounts of Seaboard Corporation and its domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Financial information from certain foreign subsidiaries is reported on a one- to three-month lag, depending on the specific entity. Investments in Affiliates Investments in non-consolidated affiliates, where Seaboard has significant influence but does not have a controlling interest, are accounted for by the equity method. Under the equity method of accounting, the initial investment is recorded at cost and the investment is subsequently adjusted for its proportionate share of earnings or losses and dividends, including consideration of basis differences resulting from the difference between the initial carrying amount of the investment and the underlying equity in net assets. Seaboard reviews its investments in affiliates for impairment whenever events or changes in business circumstances indicate that the carrying amount of the investments may not be fully recoverable. For the Commodity Trading and Milling (“CT&M”) segment, investments in affiliates are primarily in foreign countries, which are less developed than the U.S., and therefore, expose Seaboard to greater financial risks. At certain times when there are ongoing losses, local economies are depressed, commodity-based markets are less stable or foreign governments cause challenging business conditions, the fair value of the equity method investments is evaluated by management. As the fair value of these investments is not readily determinable, management uses other methods to determine fair value such as estimated future cash flows, including assumptions on growth rates and consideration of other local business conditions as applicable. Use of Estimates These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Foreign Currency Transactions and Translation Seaboard has operations in several foreign countries, and the currencies of the countries fluctuate in relation to the U.S. dollar, resulting in foreign currency gains and losses. Certain CT&M segment subsidiaries located in Guyana, Ivory Coast, Senegal, South Africa and Zambia use local currency as their functional currency. Assets and liabilities of these subsidiaries are translated to U.S. dollars at year-end exchange rates, and income and expenses are translated at average rates. Translation gains and losses are recorded as components of other comprehensive income (loss). Also, certain non-consolidated affiliates, primarily in the CT&M segment use local currency as their functional currency. Seaboard applies highly inflationary accounting for countries whose cumulative inflation rate for a three-year period meets or exceeds 100%. Under highly inflationary accounting, the financial statements of a subsidiary are remeasured into Seaboard’s reporting currency (U.S. dollars) and exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in net income, rather than accumulated other comprehensive income (loss) on the balance sheet, until the economy is no longer considered highly inflationary. Certain non-monetary assets and liabilities are recorded at the applicable historical exchange rates. Seaboard applies highly inflationary accounting for the Sugar and Alcohol segment, which operates in Argentina. Cash and Cash Equivalents Cash equivalents include all demand deposits, overnight investments and other highly liquid investments with original maturities of three months or less. ​ Supplemental Cash Flow Information The amounts paid for interest and income taxes are as follows: ​
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​ | Years ended December 31, | ​
(Millions of dollars) | 2022 | ​ | 2021 | ​ | 2020 | ​
Interest, net of interest capitalized | $ | 35 | ​ | $ | 10 | ​ | $ | 16 | ​
Income taxes, net of refunds |  | 101 | ​ |  | 104 | ​ |  | 55 | ​
​ Non-cash activities related to capital expenditures of $15 million, $5 million and $7 million that were included in accounts payable as of December 31, 2022, 2021 and 2020, respectively. Short-term Investments Short-term investments are categorized as trading securities and carried at fair value. Changes in the fair value of short-term investments are recorded as unrealized gains and losses included in other investment income (loss), net in the consolidated statements of comprehensive income, with any purchases and sales recorded on a settlement date basis. Accounts Receivable The following table presents the components of Seaboard’s receivables as of December 31, 2022 and 2021: ​
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​ | ​ | ​ | December 31,
(Millions of dollars) | ​ | ​ | 2022 |  | 2021
Receivables: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Trade | ​ | $ | 588 | ​ | $ | 553 | ​
Due from affiliates | ​ |  | 195 | ​ |  | 128 | ​
Other | ​ |  | 171 | ​ |  | 112 | ​
Total receivables | ​ |  | 954 | ​ |  | 793 | ​
Allowance for credit losses | ​ |  | (31) | ​ |  | (31) | ​
Net receivables | ​ | $ | 923 | ​ | $ | 762 | ​
​ Accounts receivable are recorded at the invoiced amount and generally do not bear interest. The allowance for credit losses is Seaboard’s best estimate of the amount of probable credit losses using the current expected credit loss model. This model estimates the lifetime of expected credit loss based on historical experience, current conditions and reasonable supportable forecasts. Changes in estimates, developing trends and other new information can have a material effect on future evaluations. As of December 31, 2022 and 2021, Seaboard had gross foreign receivables of approximately $659 million and $578 million, respectively, which generally represent more of a collection risk than the domestic receivables, although as of December 31, 2022 no individual material amounts were deemed to have a heightened risk of collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The activity within the allowance for credit losses was as follows: ​
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​ |  | Balance at | ​ |  | Transition | ​ |  | ​ | ​ |  | ​ | ​ |  | Balance at |
(Millions of dollars) | ​ | beginning of year | ​ | ​ | Adjustment(a) | ​ | ​ | Provision(b) | ​ | ​ | Net deductions(c) | ​ | ​ | end of year |
Allowance for Credit Losses: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year Ended December 31, 2022 | ​ | $ | 31 | ​ | ​ | — | ​ | ​ | 7 | ​ |  | (7) | ​ | ​ | $ | 31 | ​
Year Ended December 31, 2021 | ​ | $ | 28 | ​ | ​ | — | ​ | ​ | 5 | ​ |  | (2) | ​ | ​ | $ | 31 | ​
Year Ended December 31, 2020 | ​ | $ | 28 | ​ | ​ | 3 | ​ | ​ | — | ​ |  | (3) | ​ | ​ | $ | 28 | ​
​ (a)Adjustment made upon adoption of new guidance to retained earnings. (b)Provision amounts are charged to selling, general and administrative expenses. (c)Includes write-offs net of recoveries, foreign currency translation adjustments and other adjustments. ​ ​ Notes Receivable Notes receivable are included in other receivables, if current, and other non-current assets, if long-term. Seaboard’s non-current notes receivable balances, net of reserves, were $40 million and $30 million as of December 31, 2022 and 2021, respectively. Seaboard monitors the credit quality of notes receivable, using the current expected credit loss model. The activity within the allowance for non-current notes receivable was as follows: ​
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​ |  | Balance at |  | ​ |  | ​ |  | Balance at |
(Millions of dollars) | ​ | beginning of year | ​ | Provision | ​ | Net deductions | ​ | end of year |
Allowance for Notes Receivable: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year Ended December 31, 2022 | ​ | $ | 18 |  | — |  | (1) | ​ | $ | 17 | ​
Year Ended December 31, 2021 | ​ | $ | 17 |  | 1 |  | — | ​ | $ | 18 | ​
Year Ended December 31, 2020 | ​ | $ | 17 |  | — |  | — | ​ | $ | 17 | ​
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​ Inventories Grain, flour and feed inventories at the CT&M segment’s foreign milling operations are valued at the lower of weighted average cost and net realizable value (“NRV”). All other inventories are valued at the lower of first-in, first-out (“FIFO”) cost and NRV. In determining NRV, management makes assumptions regarding estimated sales prices, estimated costs to complete and estimated disposal costs. Changes in future market prices or facts and circumstances could result in a material write down in the value of inventory or decreased future margins on the sale of inventory. Property, Plant and Equipment Property, plant and equipment are carried at cost and, except for land, depreciated using the straight-line method over an estimated useful life, ranging from 3 to 30 years. Property, plant and equipment under finance leases are stated at the present value of minimum lease payments and subsequently amortized using the straight-line method over the earlier of the end of its useful life or the end of the lease term. Routine and planned major maintenance, repairs and minor renewals are expensed as incurred, while major renewals and improvements are capitalized. Property, plant and equipment and other long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. Impairment is recognized if the carrying amount of the assets exceeds the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Right of Use Assets and Lease Liabilities Right of Use (“ROU”) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at the lease commencement date. For leases that do not have readily determinable implicit discount rates, Seaboard adjusts its incremental borrowing rate by the local risk-free interest rate on its Term Loan due 2028 with a credit risk premium corresponding to Seaboard’s unreported credit rating. Then Seaboard determines discount rates based on term, country and currency where the leased asset is located. Seaboard accounts for lease and non-lease maintenance components as a single lease component for all classes of underlying assets. Seaboard does not recognize ROU assets and lease liabilities for short-term leases with terms greater than 1 month, but less than 12 months. Goodwill and Other Intangible Assets Goodwill is assessed annually for impairment by each reporting unit at the quarter-end closest to the anniversary date of the initial acquisition, or more frequently if events or changes in circumstances indicate that impairment is likely. Seaboard first assesses qualitative factors to determine whether it is more likely than not the fair value of any reporting unit is less than its carrying amount. If qualitative factors indicate more likely than not that an impairment is possible, Seaboard performs a quantitative impairment test using discounted cash flow analysis by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. No impairments were recorded during 2022 based on qualitative assessment and certain immaterial reporting units recorded a total of $4 million of impairment charges during 2021. The changes in the carrying amount of goodwill were as follows: ​
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​ | ​ | ​ | Pork | ​ | ​ | CT&M | ​ | ​ | ​
(Millions of dollars) |  | ​ | Segment |  | ​ | Segment | ​ | ​ | Total
Balance as of December 31, 2020 | ​ | $ | 18 | ​ | $ | 149 | ​ | $ | 167
Impairment | ​ | ​ | — | ​ | ​ | (4) | ​ | ​ | (4)
Balance as of December 31, 2021 | ​ | ​ | 18 | ​ | ​ | 145 | ​ | ​ | 163
Foreign currency translation | ​ | ​ | — | ​ | ​ | (13) | ​ | ​ | (13)
Acquisition | ​ |  | 4 | ​ |  | — | ​ | ​ | 4
Balance as of December 31, 2022 | ​ | $ | 22 | ​ | $ | 132 | ​ | $ | 154
​ Separable intangible assets with finite lives are amortized over their estimated useful lives and evaluated for impairment similar to property, plant and equipment discussed above. The gross carrying amount and accumulated amortization for finite-lived intangible were as follows: ​
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​ | ​ | December 31, 2022 | ​ | ​ | December 31, 2021 | ​
​ | ​ | Customer | ​ | Trade | ​ | ​ | ​ | ​ | Customer | ​ | Trade | ​ | ​ | ​
(Millions of dollars) | ​ | relationships | ​ | names | ​ | Total | ​ | ​ | relationships | ​ | names | ​ | Total | ​
Gross carrying amount | $ | 51 | $ | 28 | $ | 79 | ​ | $ | 51 | $ | 28 | $ | 79 | ​
Accumulated amortization and currency translation | ​ | (31) | ​ | (17) | ​ | (48) | ​ | ​ | (22) | ​ | (12) | ​ | (34) | ​
Net carrying amount | $ | 20 | $ | 11 | $ | 31 | ​ | $ | 29 | $ | 16 | $ | 45 | ​
​ Amortization of intangible assets was $8 million, $9 million and $8 million for the years ended December 31, 2022, 2021 and 2020, respectively. Using the exchange rates in effect at year-end, estimated amortization of intangible assets as of December 31, 2022 is $8 million each year for the next three years and $7 million in year four. Accrued Self-Insurance Seaboard is self-insured for certain levels of workers’ compensation, health care coverage, property damage, vehicle, product recall and general liability. Liabilities associated with some of these risks is estimated based on actuarially-determined amounts and accrued in part by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Changes in estimates to previously recorded reserves are reflected in current operating results. Asset Retirement Obligation Seaboard records a long-lived asset and a related liability for the asset retirement obligation costs associated with the closure of all hog lagoons. Based on detailed assessments and appraisals obtained to estimate the future asset retirement obligation costs, Seaboard recorded the present value of the projected costs in other non-current liabilities in the consolidated balance sheets. The retirement asset is depreciated over the economic life of the related asset. The following table shows the changes in the asset retirement obligation: ​
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​ | ​ | Years ended December 31,
(Millions of dollars) |  | 2022 |  | 2021
Beginning balance | ​ | $ | 29 | ​ | $ | 27
Accretion expense | ​ |  | 2 | ​ |  | 1
Liability for additional lagoons | ​ |  | 1 | ​ |  | 1
Ending balance | ​ | $ | 32 | ​ | $ | 29
​ Pension Plans Seaboard records annual income and expense amounts relating to its pension plans based on calculations which include various actuarial assumptions, including discount rates, mortality, assumed rates of return, compensation increases, and turnover rates. Seaboard reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so. The effect of modifications on the value of plan obligations and assets is recognized immediately within other comprehensive income (loss) and amortized into operating earnings over future periods. The measurement date for all plans is December 31st. Any overfunded status is recognized as an asset and any underfunded status is recognized as a liability. The service cost component of net periodic benefit cost is recorded in either cost of sales or selling, general and administrative expenses depending upon the employee, and the other components of net periodic benefit cost are recorded in miscellaneous, net in the consolidated statements of comprehensive income. Settlements are recognized when lump sum payments on a cumulative basis exceed the service cost plus interest cost for the respective plan. ​ Revenue Recognition Almost all of Seaboard’s contracts with its customers are less than one year. Seaboard recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration it expects to receive in exchange for those goods or services. The majority of Seaboard’s revenue arrangements consist of a single performance obligation as the promise to transfer the individual product or service is not separately identifiable from other promises in the contracts, including shipping and handling and customary storage, and, therefore, not distinct. Revenue from goods and services transferred to customers at a single point in time account for approximately 85% of Seaboard’s net sales. Substantially all of the sales in Seaboard’s Marine segment are recognized ratably over the transit time for each voyage, as the performance obligation to its customers is satisfied. Seaboard’s transaction prices are mostly fixed, but occasionally include minimal variable consideration for early payment, volume and other similar discounts, which are highly probable based on the history with the respective customers. Taxes assessed by a governmental authority that are collected by Seaboard from a customer are excluded from sales. Seaboard recognizes a financing component only on obligations that extend longer than one year. Deferred revenue represents cash payments received in advance of Seaboard’s performance or revenue billed that is unearned. The CT&M segment requires certain customers to pay in advance or upon delivery to avoid collection risk. The Marine segment’s deferred revenue balance primarily relates to the unearned portion of billed revenue when a ship is on the water and has not arrived at the designated port. Deferred revenue balances are reduced when revenue is recognized. The majority of the deferred revenue balance as of year-end is recognized as revenue during the following quarter. Research and Development Seaboard conducts research and development activities to develop new products and to improve existing products and processes. Seaboard incurred research and development expenses of $210 million, $191 million and $134 million for the years ended December 31, 2022, 2021 and 2020, respectively. Income Taxes Effects of changes in tax laws, including retroactive changes, are recognized in the financial statements in the period that the changes are enacted. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Seaboard accounts for the global intangible low-taxed income (“GILTI”) provision and the base-erosion and anti-abuse tax (“BEAT”) provision taxes in the period incurred. For quarters, Seaboard computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income or loss and adjusts the provision for discrete tax items recorded in the period. Earnings Per Common Share Earnings per common share are based upon the weighted-average shares outstanding during the period. Basic and diluted earnings per share are the same for all periods presented. Accounting Standards Recently Adopted On January 1, 2020, Seaboard adopted guidance requiring the use of a new current expected credit loss model to determine the allowance for credit losses for receivables, among other financial instruments. This model estimates the lifetime of expected credit loss and replaces the existing incurred loss model. As a result of this adoption, Seaboard recorded a cumulative-effect adjustment of $3 million on January 1, 2020 that decreased retained earnings and increased the allowance for credit losses.

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- Definition The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -URI https://asc.fasb.org/topic&trid=2122149 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI https://asc.fasb.org/topic&trid=2197479 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI https://asc.fasb.org/topic&trid=2122369 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI https://asc.fasb.org/topic&trid=2134479 + Details
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