Company: NGVT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001653477-25-000015
Chunk: 1035

Company: Ingevity Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 1035
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 support structures and foundations15VariousVariousLeases: We lease various assets for use in our operations that are classified as both operating and financing leases. At contract inception, we determine that a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as the right to direct the use of that asset. If a contract is considered to be a lease, we recognize a lease liability based on the present value of the future lease payments, with an offsetting entry to recognize a right-of-use asset. As a majority of our leases do not provide an explicit rate within the lease, an incremental borrowing rate is used, which is based on information available at the commencement date. The determination of the incremental borrowing rate for each individual lease was impacted by the following assumptions: lease term, currency, and the economic environment for the physical location of the leased asset. 

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IndexIngevity CorporationNotes to the Consolidated Financial StatementsDecember 31, 2024

Our operating leases principally relate to the following leased asset classes:Leased Asset ClassRemaining Lease TermAdministrative offices 2 to 15 yearsManufacturing buildings4 to 50 yearsManufacturing and office equipment1 to 11 yearsWarehousing and storage facilities3 to 10 yearsRail cars0 to 10 yearsLeases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term. Some of our leases include options to extend the lease term at our sole discretion. We account for lease and non-lease components together as a single component for all lease asset classes. The depreciable life of assets and leasehold improvements is limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Certain leases provide for escalation of the lease payments, as well as maintenance costs and taxes increase. Asset retirement obligations: We record asset retirement obligations (“AROs”) at fair value at the time the liability is incurred if we can reasonably estimate the settlement date. The associated AROs are capitalized as part of the carrying amount of related long-lived assets. In future periods, the liability is accreted to its present value and the capitalized cost is depreciated over the useful life of the related asset. We also adjust the liability for changes resulting from the