Investments and Income (Loss) Recognition
The Plan’s investments are stated at fair value. Fair value of financial instruments is what would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 for discussion of fair value measurements.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date. Net appreciation (depreciation) includes the Plan’s gains and losses on investments bought and sold as well as held during the year.
Notes Receivable from Participants
Notes Receivable from participants are stated at their unpaid principal balance, plus accrued but unpaid interest. Loans outstanding are
reflected as a receivable of the Plan. Interest income is recorded on an accrual basis. No allowance for credit losses has been recorded as of December 31, 2022 or 2021. If a participant ceases to make loan repayments and the plan administrator
deems the participant loan to be in default, the participant loan balance is reduced, and a benefit payment is recorded.
Payment of
Benefits
Benefits are recorded when paid.
Administrative Expenses
Plan provisions allow for administrative expenses, including, but not limited to, audit fees, custodial and trustee fees, investment manager
fees, and recordkeeping fees to be paid by the Plan and allocated to participant accounts. Any expenses not borne by the Plan are paid by the Company.
| 3. |
Fair Value Measurements |
GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy provides the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3
measurements). The three levels of fair value hierarchy under GAAP are described as follows:
Level 1: Unadjusted quoted prices in
active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market asset or liability is a market in which the transaction for the asset or liability occurs with sufficient frequency and
volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 prices, such as a
quoted price for similar assets or liabilities, quoted market prices in markets that are active, or model-derived valuation or other inputs that are observable or can be corroborated by observable market data for substantially the full terms of the
assets or liabilities.
Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and
unobservable.
The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of
any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the
methodologies used at December 31, 2022 and 2021.
Common Stock: Shares of ING Common Stock ADRs are stated at fair value,
which equals the exchange quoted market price on the last business day of the Plan year.
Mutual Funds: Valued at the daily closing
price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily Net Asset
Value (“NAV”) and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded (Level 1 measurements).
Common Collective Trust Fund: The T. Rowe Price Stable Value Fund is a common collective trust fund that is valued at the net asset
value using NAV as the practical expedient based on the last reported sales price of the underlying investments held. The Plan’s interest in the collective trust was based on information reported by the trustee using the audited financial
statements of the collective trust at year-end. The investment income (loss) was allocated to participants based on their proportionate share of the net assets of the fund.
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