31 ASC 450 CONTINGENCIES
PERSPECTIVE AND ISSUES
ASC 450, Contingencies, contains guidance for reporting and disclosure of gain and loss contingencies and has three subtopics:
- ASC 450-10, Overall, which, along with ASC 450-20450-30, provides guidance on accounting and disclosures for contingencies
- ASC 450-20, Loss Contingencies, which describes accounting for potential liabilities in circumstances involving uncertainties.
- ASC 450-30, Gain Contingencies, which describes accounting and disclosure requirements for gain contingencies.
Scope and Scope Exceptions
ASC 450 applies to all entities. Not all uncertainties are contingencies. ASC 450-10-55 points out several common estimates that do not fall under the contingency guidance:
- Estimates used in accruals
- Changes in tax law.
ASC 450-10-15-2A has the following transaction exception:
“The guidance in the Contingencies Topic does not apply to the recognition and initial measurement of assets or liabilities arising from contingencies that are measured at fair value or assets arising from contingencies measured at an amount other than fair value ...