Supplementary Financial Statement Information (Note)

12 Months Ended

Dec. 31, 2020

Disclosure Text Block Supplement [Abstract]

Supplementary Financial Statement Information

TEMPORARY INVESTMENTS 

Temporary investments with an original maturity of three months or less and money market funds with greater than three month maturities but with the right to redeem without notices are treated as cash equivalents and are stated at cost. Temporary investments totaled $358 million and $335 million at December 31, 2020 and 2019, respectively.

ACCOUNTS AND NOTES RECEIVABLE

Accounts and notes receivable, net, by classification were: 

In millions at December 31	2020		2019
Accounts and notes receivable:
Trade	$	2,776	$	3,020
Other	288		260
Total	$	3,064	$	3,280

The allowance for expected credit losses was $76 million at December 31, 2020 and the allowance for doubtful accounts was $73 million at December 31, 2019. Based on the Company's accounting estimates and the facts and circumstances available as of the reporting date, we believe our allowance for expected credit losses is adequate. While we have taken into account certain impacts of COVID-19 in connection with our estimate of the allowance for expected credit losses, it is possible that additional expected credit losses in excess of such allowance could occur if additional containment and mitigation measures are required or negative economic conditions persist or deteriorate as a result of COVID-19.

INVENTORIES 

In millions at December 31	2020		2019
Raw materials	$	268	$	298
Finished pulp, paper and packaging products	1,091		1,192
Operating supplies	627		659
Other	64		59
Inventories	$	2,050	$	2,208

The last-in, first-out inventory method is used to value most of International Paper’s U.S. inventories. Approximately 74% of total raw materials and finished

products inventories were valued using this method. The last-in, first-out inventory reserve was $242 million and $295 million at December 31, 2020 and 2019, respectively.

PLANTS, PROPERTIES AND EQUIPMENT 

In millions at December 31	2020		2019
Pulp, paper and packaging facilities	$	32,439	$	32,292
Other properties and equipment	1,156		1,224
Gross cost	33,595		33,516
Less: Accumulated depreciation	21,378		20,512
Plants, properties and equipment, net	$	12,217	$	13,004

Non-cash additions to plants, property and equipment included within accounts payable were $41 million, $164 million and $135 million at December 31, 2020, 2019 and 2018, respectively.  

Amounts invested in capital projects in the accompanying condensed consolidated statement of cash flows are presented net of insurance recoveries of $42 million received during the year ended December 31, 2020. There were no insurance recoveries received during the years ended December 31, 2019 and 2018.

Annual straight-line depreciable lives generally are, for buildings - 20 to 40 years, and for machinery and equipment - 3 to 20 years. Depreciation expense was $1.2 billion for the each of the years ended December 31, 2020, 2019 and 2018. Cost of products sold excludes depreciation and amortization expense.

INTEREST

Interest payments of $686 million, $754 million and $772 million were made during the years ended December 31, 2020, 2019 and 2018, respectively.

Amounts related to interest were as follows: 

In millions	2020		2019		2018
Interest expense	$	600	$	706	$	734
Interest income	156		215		198
Capitalized interest costs	31		29		30

ASSET RETIREMENT OBLIGATIONS

At December 31, 2020 and 2019, we had recorded liabilities of $116 million and $96 million, respectively, related to asset retirement obligations.