Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of consolidation [Policy Text Block]

All majority-owned subsidiaries are included in the Company’s consolidated financial statements,

with appropriate elimination of intercompany balances and transactions.

Consolidation, Variable Interest Entity [Policy Text Block]

The Company is not the primary beneficiary of any variable interest entities (“VIEs”) and therefore the

Company’s consolidated financial statements do not include the accounts of any VIEs.

Equity and Cost Method Investments [Policy Text Block]

Investments in associated companies (less than majority-

owned and in which the Company has significant influence) are accounted for under the equity method. The Company’s share of net

income or losses in these investments in associated companies is included in the Consolidated Statements of Income. The Company

periodically reviews these investments for impairments and, if necessary, would adjust these investments to their fair value when a

decline in market value or other impairment indicators are deemed to be other than temporary.

Translation of foreign currency [Policy Text Block]

Assets and liabilities of non-U.S. subsidiaries and associated comp anies are translated into

U.S. dollars at the respective rates of exchange prevailing at the end of the year. Income and expense accounts are translated at

average exchange rates prevailing during the year. Translation adjustments resulting from this process are recorded directly in equity

as accumulated other comprehensive (loss) income (“AOCI”) and will be included as income or expense only upon sale or liquidation

of the underlying entity or asset. Generally, all of the Company’s non-U.S. subsidiaries use their local currency as their functional

currency.

Cash and Cash Equivalents [Policy Text Block]

The Company invests temporary and excess funds in money market securities and financial

instruments having maturities within 90 days. The Company considers all highly liquid investments with original maturities of three

months or less to be cash equivalents.

 The Company has not experienced losses from the aforementioned investments.

Inventories [Policy Text Block]

Inventories:

Inventories are valued at the lower of cost or net realizable value, and are valued using the first-in, first-out method.

Long-lived assets [Policy Text Block]

Property, plant and equipment (“PP&E”) are stated at gross cost, less accumulated depreciation. Depreciation

is computed using the straight-line method on an individual asset basis over the following estimated useful lives: building s and

improvements,

10

 to

45

 years; and machinery and equipment,

1

 to

15

 years. The carrying values of long-lived assets are evaluated

whenever changes in circumstances or current events indicate the carrying amount of such assets may not be recoverable. An estimate

of undiscounted cash flows produced by the asset, or the appropriate group of assets, is compared with the carrying value to determine

whether an impairment exists. If necessary, the Company recognizes an impairment loss for the difference between the carrying

amount of the assets and their estimated fair value. Fair value is based on current and anticipated future cash flows. Upon sale or

other dispositions of long-lived assets, the applicable amounts of asset cost and accumulated depreciation are removed from the

accounts and the net amount, less proceeds from disposals, is recorded in the Consolidated Statements of Income. Expenditures for

renewals or improvements that increase the estimated useful life or capacity of the assets are capitalized, whereas expenditures for

repairs and maintenance are expensed when incurred.

Capitalized software [Policy Text Block]

The Company capitalizes certain costs in connection with developing or obtaining software for internal

use, depending on the associated project. These costs are amortized over a period of

3

 to

5

 years once the assets are ready for their

intended use.

Goodwill and other intangible assets [Policy Text Block]

The Company records goodwill, definite-lived intangible assets and indefinite-lived

intangible assets at fair value at the date of acquisition. Goodwill and indefinite-lived intangible assets are not amortized but tested for

impairment at least annually. These tests will be performed more frequently if triggering events indicate potential impairment.

Definite-lived intangible assets are amortized on a straight -line basis over their estimated useful lives, generally for periods ranging

from

4

 to

20

 years. The Company continually evaluates the reasonableness of the useful lives of these assets, consistent with the

discussion of long-lived assets, above.

Revenue recognition [Policy Text Block]

The Company applies the Financial Accounting Standards Board’s (“FASB’s”) guidance on revenue

recognition which requires the Company to recognize revenue in an amount that reflects the consideration to which the Company

expects to be entitled in exchange for goods or services transferred to its customers. To do this, the Company applies the five-step

model in the FASB’s guidance, which requires the Company to: (i) identify the contract with a customer; (ii) identify the performance

obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the

contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation.

Accounts receivable and allowance for doubtful accounts [Policy Text Block]

Trade accounts receivable subject the Company to credit risk. 

Trade accounts receivable are recorded at the invoiced amount and generally do not bear interest. The allowance for doubtful

accounts is the Company’s best estimate of the amount of expected credit losses with its existing accounts receivable.

The Company recognizes an allowance for credit losses, which represents the portion of the receivable that the Company does not

expect to collect over its contractual life, considering past events and reasonable and supportable forecasts of future economic

conditions. The Company’s allowance for credit losses on its trade accounts receivable is based on specific collectability facts and

circumstances for each outstanding receivable and customer, the aging of outstanding receivables, and the associated collection risk

the Company estimates for certain past due aging categories, and also, the general risk to all outstanding accounts receivable based on

historical amounts determined to be uncollectible. The Company does not have any off-balance-sheet credit exposure related to its

customers.

Research and Development Expense, Policy [Policy Text Block]

 Research and development costs are expensed as incurred and are included in selling, general

and administrative expenses (“SG&A”).

Environmental liabilities and expenditures [Policy Text Block]

Accruals for environmental matters are recorded when it is probable that a liability

has been incurred and the amount of the liability can be reasonably estimated. If there is a range of estimated liability and no amount

in that range is considered more probable than another, then the Company records the lowest amount in the range in accordance with

generally accepted accounting principles in the United States (“U.S. GAAP”). Environmental costs and remediation costs are

capitalized if the costs extend the life, increase the capacity or improve safety or efficiency of the property from the date acquired or

constructed, and/or mitigate or prevent contamination in the future.

Asset Retirement Obligations, Policy [Policy Text Block]

The Company follows the FASB’s guidance regarding asset retirement obligations, which

addresses the accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated

retirement costs. Also, the Company follows the FASB’s guidance for conditional asset retirement obligations (“CARO”), which

relates to legal obligations to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on

a future event that may or may not be within the control of the entity. In accordance with this guidance, the Company records a

liability when there is enough information regarding the timing of the CARO to perform a probability-weighted discounted cash flow

analysis.

Pension and other postretirement benefits [Policy Text Block]

ther postretirement benefits:

The Company maintains various noncontributory retirement plans, covering a

portion of its employees in the U.S. and certain other countries, including the Netherlands, the United Kingdom (“U.K.”), Mexico,

Sweden, Germany and France. These retirement plans are subject to the provisions of FASB’s guidance regarding employers’

accounting for defined benefit pension plans. The plans of the remaining non-U.S. subsidiaries are, for the most part, either fully

insured or integrated with the local governments’ plans and are not subject to the provisions of the guidance. The guidance requires

that employers recognize on a prospective basis the funded status of their defined benefit pension and other postretirement plans on

their consolidated balance sheet and, also, recognize as a component of AOCI, net of tax, the gains or losses and prior service costs or

credits that arise during the period but are not recognized as components of net periodic benefit cost. In addition, the guidance

requires that an employer recognize a settlement charge in their consolidated statement of income when certain events occur,

including plan termination or the settlement of certain plan liabilities. A settlement charge represents the immediate recognition into

expense of a portion of the unrecognized loss within AOCI on the balance sheet in proportion to the share of the projected benefit

obligation that was settled. The Company’s Legacy Quaker U.S. pension plan year ends on November 30 and the measurement date is

December 31. The measurement date for the Company’s other postretirement benefits plan is December 31. 

The Company’s global pension investment policies are designed to ensure that pension assets are invested in a manner consistent

with meeting the future benefit obligations of the pension plans and maintaining compliance with various laws and regulations

including the Employee Retirement Income Security Act of 1974. The Company establishes strategic asset allocation percentage

targets and benchmarks for significant asset classes with the aim of achieving a prudent balance between return and risk. The

Company’s investment horizon is generally long term, and, accordingly, the target asset allocations encompass a long-term

perspective of capital markets, expected risk and return and perceived future economic conditions while also considering the profile of

plan liabilities. To the extent feasible, the short-term investment portfolio is managed to match the short-term obligations, the

intermediate portfolio duration is matched to reduce the risk of volatility in intermediate plan distributions, and the total return

portfolio is managed to maximize the long-term real growth of plan assets. The critical investment principles of diversification,

assessment of risk and targeting the optimal expected returns for given levels of risk are applied. The Company’s investment

guidelines prohibit the use of securities such as letter stock and other unregistered securities, commodities or commodity contracts,

short sales, margin transactions, private placements (unless specifically addressed by addendum), or any derivatives, options or futures

for the purpose of portfolio leveraging. 

The target asset allocation is reviewed periodically and is determined based on a long-term projection of capital market outcomes,

inflation rates, fixed income yields, returns, volatilities and correlation relationships. The interaction between plan assets and benefit

obligations is periodically studied to assist in establishing such strategic asset allocation targets. Asset performance is monitored with

an overall expectation that plan assets will meet or exceed benchmark performance over rolling five-year periods. The Company’s

pension committee, as authorized by the Company’s Board of Directors, has discretion to manage the assets within established asset

allocation ranges approved by senior management of the Company.

Comprehensive income (loss) [Policy Text Block]

The Company presents other comprehensive income (loss) in its Statements of Comprehensive

Income. The Company follows the FASB’s guidance regarding the disclosure of reclassifications from AOCI which requires the

disclosure of significant amounts reclassified from each component of AOCI, the related tax amounts and the income statement line

items affected by such reclassifications.

Income taxes and uncertain tax positions [Policy Text Block]

The provision for income taxes is determined using the asset and liability approach

of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the

reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or

payable for the current year and the change in deferred taxes during the year. Deferred taxes result from differences between the

financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are

enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be

realized. The FASB’s guidance regarding accounting for uncertainty in income taxes prescribes the recognition threshold and

measurement attributes for financial statement recognition and measurement of tax positions taken or expected to be taken on a tax

return. The guidance further requires the determination of whether the benefits of tax positions are probable or more likely than not

sustained upon audit based upon the technical merits of the tax position. For tax positions that are determined to be more likely than

not sustained upon audit, a company recognizes the largest amount of benefit that is greater than

50

% likely of being realized upon

ultimate settlement in the financial statements. For tax positions that are not determined to be more likely than not sustained upon

audit, a company does not recognize any portion of the benefit in the financial statements. Additionally, the Company monitors and

adjusts for derecognition, classification, and penalties and interest in interim periods, with appropriate disclosure and transition

thereto. Also, the amount of interest expense and income related to uncertain tax positions is computed by applying the applicable

statutory rate of interest to the difference between the tax position recognized, including timing differences, and the amount previously

taken or expected to be taken in a tax return. The Company recognizes interest and/or penalties related to income tax matters in

income tax expense. Finally, when applicable, the Company nets its liability for unrecognized tax benefits against deferred tax assets

related to net operating losses or other tax credit carryforwards that would apply if the uncertain tax position were settled for the

presumed amount at the balance sheet date.

Derivatives [Policy Text Block]

The Company is exposed to the impact of changes in interest rates, foreign currency fluctuations, changes in

commodity prices and credit risk. The Company utilizes interest rate swap agreements to enhance its ability to manage risk, including

exposure to variability in interest payments associated with its variable rate debt. Derivative instruments are entered into for periods

consistent with the related underlying exposures and do not constitute positions independent of those exposures. As of December 31,

2020 and 2019, the Company had certain interest rate swap agreements that were designated as cash flow hedges. Interest rate swaps

are entered into with a limited number of counterparties, each of which allows for net settlement of all contracts through a single

payment in a single currency in the event of a default on or termination of any one contract. The Company records these instruments

on a net basis within the Consolidated Balance Sheets. The effective portion of the change in fair value of the agreement is recorded

in AOCI and will be recognized in the Consolidated Statements of Income when the hedge item affects earnings or losses or it

becomes probable that the forecasted transaction will not occur.

Fair value measurements [Policy Text Block]

The Company utilizes the FASB’s guidance regarding fair value measurements, which establishes a

common definition for fair value to be applied to guidance requiring use of fair value, establishes a framework for measuring fair

value and expands disclosure about such fair value measurements. Specifically, the guidance utilizes a fair value hierarchy that

prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

•

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These

include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or

liabilities in markets that are not active.

•

Level 3: Unobservable inputs that reflect the reporting entity's own assumptions.

Share-based compensation [Policy Text Block]

The Company applies the FASB’s guidance regarding share-based payments, which requires the

recognition of the fair value of share-based compensation as a component of expense. The Company has a long-term incentive

program (“LTIP”) for key employees which provides for the granting of options to purchase stock at prices not less than its market

value on the date of the grant. Most options become exercisable within

three years

 after the date of the grant for a period of time

determined by the Company, but not to exceed

seven years

 from the date of grant. Restricted stock awards and restricted stock units

issued under the LTIP program are subject to time vesting generally over a

one

 to

three-year

 period. In addition, as part of the

Company’s Annual Incentive Plan, nonvested shares may be issued to key employees, which generally would vest over a

two

 to

five

-

year period. 

In addition, while the FASB’s guidance permits the Company to make an accounting policy election to account for forfeitures as

they occur for service condition aspects of certain share-based awards, the Company has decided not to elect this accounting policy

and instead has elected to continue utilizing a forfeiture rate assumption. Based on historical experience, the Company has assumed a

forfeiture rate of

13

% on certain of its nonvested stock awards. The Company will record additional expense if the actual forfeiture

rate is lower than estimated and will record a recovery of prior expense if the actual forfeiture is higher than estimated. 

The Company also issues performance-dependent stock awards as a component of its LTIP. The fair value of the performance-

dependent stock awards is based on their grant-date market value adjusted for the likelihood of attaining certain pre -determined

performance goals and is calculated by utilizing a Monte Carlo Simulation model. Compensation expense is recognized on a straight-

line basis over the vesting period, generally

three years

.

Earnings Per Share [Policy Text Block]

The Company follows the FASB’s guidance regarding the calculation of earnings per share for nonvested

stock awards with rights to non-forfeitable dividends. The guidance requires nonvested stock awards with rights to non-forfeitable

dividends to be included as part of the basic weighted average share calculation under the two-class method.

Segments [Policy Text Block]

The Company’s reportable segments reflect the structure of the Company’s internal organization, the method by

which the Company’s resources are allocated and the manner by which the Company and the chief operating decision maker assess its

performance

Business Combinations [Policy Text Block]

The Company accounts for business combinations under the acquisition method of accounting. This

method requires the recording of acquired assets, including separately identifiable intangible assets and assumed liabilities at their

respective acquisition date estimated fair values. Any excess of the purchase price over the estimated fair value of the identifiable net

assets acquired is recorded as goodwill. The determination of the estimated fair value of assets acquired and liabilities assumed

requires significant estimates and assumptions. Based on the assessment of additional information during the measurement period,

which may be up to one year from the acquisition date, the Company may record adjustments to the estimated fair value of assets

acquired and liabilities assumed.

Restructuring activities [Policy Text Block]

Restructuring programs consist of employee severance, rationalization of manufacturing or other

facilities and other related items. To account for such programs, the Company applies FASB’s guidance regarding exit or disposal

cost obligations. This guidance requires that a liability for a cost associated with an exit or disposal activity be recognized when the

liability is incurred, is estimable, and payment is probable.

Reclassification [Policy Text Block]

Certain information has been reclassified to conform to the current year presentation.

Accounting estimates [Policy Text Block]

The preparation of financial statements in conformity with generally accepted accounting principles

requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of

contingencies at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. 

Actual results could differ from such estimates.

Credit Loss Financial Instrument [Policy Text Block]

The Company recognizes an allowance for credit losses, which represents the portion of the receivable that the Company does not

expect to collect over its contractual life, considering past events and reasonable and supportable forecasts of future economic

conditions. The Company estimates credit losses for trade receivables by aggregating similar customer types, because they tend to

share similar credit risk characteristics. The Company’s allowance for credit losses on its trade accounts receivable is based on

specific collectability facts and circumstances for each outstanding receivable and customer, the aging of outstanding receivables, and

the associated collection risk the Company estimates for certain past due aging categories, and also, the general risk to all outstanding

accounts receivable based on historical amounts determined to be uncollectible. Trade and other receivables are written off when

there is no reasonable expectation of recovery.