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Wiley GAAP 2020
book

Wiley GAAP 2020

by Joanne M. Flood
February 2020
Intermediate to advanced content levelIntermediate to advanced
1456 pages
52h 54m
English
Wiley
Content preview from Wiley GAAP 2020

31ASC 440 COMMITMENTS

PERSPECTIVE AND ISSUES

Subtopics

ASC 440, Commitments, contains only one subtopic:

  • ASC 440-10, Overall, which provides general guidance on financial accounting and reporting for certain commitments.

The subtopic has two subsections:

  1. General
  2. Unconditional Purchase Obligations

The General subsection provides guidance for:

  • Unused letters of credit,
  • Preferred stock dividends in arrears,
  • Commitments such as those for plant acquisitions, and
  • Obligations to reduce debts, maintain working capital, or restrict dividends.
  • (ASC 440-10-05-2)

The Unconditional Purchase Obligation subsection provides guidance for unconditional purchase obligations, such as throughput and take-or-pay contracts. (ASC 440-10-05-3)

Scope and Scope Exceptions

ASC 440 applies to all transactions. However, for guidance on product financing arrangements, the preparer should look to ASC 470-40-15. Upon implementation of ASU 2014-09, guidance on repurchase agreements within the scope of ASC 606 can be found in ASC 606-10-55-66 through 55-78. (ASC 440-10-15-4)

Overview

All significant contractual commitments must be disclosed in the notes to the financial statements. For example, lease contract provisions, pension obligations, requirements contracts, bond indenture covenants, commitments ...

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Publisher Resources

ISBN: 9781119652625