Accrued Expenses and Liabilities

Accrued Expenses and Liabilities
Date Issued: November 2013

Author: Matt Murray
1.0: Purpose
The following policy is intended to be a resource for finance professionals at Ingredion (the
“Company”) for guidance on specific accounting methods and application of US Generally
Accepted Accounting Principles (“US GAAP”). This policy does not replace or alter applicable
US GAAP; however, it is merely intended to assist in the consistent accounting across the
Company. Since all circumstances cannot be addressed in their entirety by these
guidelines, professional judgment is necessary in their application. When handling is in
question, please contact the Corporate Controller’s Group (Corporate Controller or Director
of Accounting Policy/Research).
2.0: Persons Affected
This policy is applicable to all domestic and international locations for Ingredion, Inc. and all
consolidated subsidiaries.
3.0: Applicable US GAAP Accounting Guidance
N/A
4.0: Policy
The purpose of this policy is to discuss the policies and procedures related to accrued
expenses, accrued liabilities and other current liabilities.
4.1 General operating expenses should be expensed when incurred and recorded to the
appropriate income statement account based on the type of expense incurred. See the
policies Cost of Goods Sold and Selling, General, and Administrative Expenses and Other
Income and Expenses for more information on the appropriate income statement account to
use.
4.2 Loss contingencies should be evaluated in accordance with the Contingencies policy.
4.3 Operating expenses incurred at month end, but unpaid, should be recorded as accrued
expenses or accrued liabilities based on estimates of amounts due for services rendered (if
actual amounts are unknown).
4.3.1 The invoicing and payment of these liabilities could occur many months
subsequent to the month in which the service was provided to/received by the
Company, but should not prevent an entity from recorded these operating expenses
in the period incurred.
4.3.2 Lack of final invoice should not delay recording expense in the period incurred
as best estimates based on the discussion in 4.3.3 below can be considered
appropriate.
4.3.3 Local accounting should accrue these expenses based on best available
information derived from either a) past experience, b) subsequent receipt of the
Author: Matt Murray
invoice, c) past experience with the vendor, or d) contractual agreements in absence

of an invoice.
4.3.4 Some examples of accrued expenses/liabilities include utilities, salaries and

wages, interest, third-party fees, and consulting expenses.
4.4 Goods received or services incurred at month-end, but unpaid, should be recorded as a
liability. Local accounting should establish processes and procedures to determine if all
incurred expenses have been accrued at each period end. These processes should capture
all incurred, but unpaid and unbilled services and/or nonrecurring expenses that could
require accrual.
4.4.1 As discussed in 4.3 above, accrued expenses should be recorded based on best
estimates of amounts incurred and therefore accruals should not be based on
budget/goal if better information is available.
4.4.2 Accruing expenses to budget is not appropriate if expenses have not been
incurred or if better information is available to determine a better estimate of the
accrual.
4.5 Accrued expenses and liabilities should be classified on the balance sheet based on
when these obligations are expected to be satisfied (i.e. paid) by the Company.
4.5.1 Current accrued expenses or liabilities are obligations expected to be

settled/paid within one year.
4.5.2 Non-current accrued expenses or liabilities are obligations expected to be

settled/paid in excess of one year.
4.6 Deposits received by the Company should be recorded as a liability in the period
received and classified as either current or noncurrent depending on when estimated to be
returned to the customer/vendor/etc.
4.7 A liability for employee payroll taxes (or similar charges such as social charges) on
employee stock compensation shall be recognized on the date of the event triggering
measurement and payment of the tax to the taxing authority (for a nonqualified option in
the United States, generally the exercise date). As such, the liability and related expense
should not be accrued in advance of the date of the event in which triggers payment to the
taxing authority.
5.0: Definitions
Loss Contingency – an existing condition, situation, or set of circumstances involving

uncertainty as to possible loss to an entity that will ultimately be resolved when one or more
future events occur or fail to occur.
6.0: Responsibilities
Author: Matt Murray
N/A
7.0: Related Documents
N/A
8.0: Exhibits
Account Table:
SAP Account SAP Hyperion Hyperion Description of

Description Account Description Intended Use of
Account
9.0: Change Matrix
Section Reason for Change Date

All Initial issuance 11/15/13

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Date Issued: November 2013

2.0: Persons Affected

3.0: Applicable US GAAP Accounting Guidance

invoice, c) past experience with the vendor, or d) contractual agreements in absence

4.3.4 Some examples of accrued expenses/liabilities include utilities, salaries and

4.5.1 Current accrued expenses or liabilities are obligations expected to be

4.5.2 Non-current accrued expenses or liabilities are obligations expected to be

Loss Contingency – an existing condition, situation, or set of circumstances involving

7.0: Related Documents

SAP Account SAP Hyperion Hyperion Description of

9.0: Change Matrix

Section Reason for Change Date

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