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 ...

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