Perspective and Issues


Scope and Scope Exceptions

Definitions of Terms

Concepts, Rules, and Examples

Natures of Operations

Use of Estimates in the Preparation of Financial Statements

Certain Significant Estimates

Examples of items that may be based on estimates that are particularly sensitive to change in the near term

Current Vulnerability Due to Concentrations

Examples of concentrations that need disclosure

Example Disclosure – Geographic Concentration

Other Sources



ASU 275, Risks and Uncertainties, contains one subtopic:

  • ASU 275-10, Overall, that provides guidance on disclosures of risks and uncertainties inherent in entity's operations.

This topic recognizes that all businesses face risk and uncertainty. The objective of ASC 275 is to provide guidelines that will enable the preparer to screen the many risks and uncertainties faced by entities and focus on those most useful to the readers of the particular entity's report, those that will enable the readers to assess the future cash flows and result of operations. Thus, the topic focuses on screening criteria for risks and uncertainties and the resulting required disclosures.

Scope and Scope Exceptions

The guidance applies to all GAAP financial statements, interim and annual, but not to condensed or summarized financial statements. The guidance does not apply to risks and uncertainties associated with:

  • “Management or key personnel
  • Proposed changes ...

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