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 450-10.

ASC 450-10 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:

  • Depreciation
  • Estimates used in accruals
  • Changes in tax law.

ASC 450 guidance 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 on the acquisition date in a business combination or
  • An acquisition by a not-for-profit entity under the requirements of Subtopic 805-20 or 958-805.
  • ASC 450-10-15-2A

ASC 450-20.

The following transactions are excluded from the guidance in ASC 450-20 because their guidance is elsewhere in the Codification:

  • Stock issued to employees. (ASC 718)
  • Employment-related costs, including deferred compensation contracts. (ASC 710, ...

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