Perspective and Issues

Concepts, Rules, and Examples

Loss Contingencies

General rules for loss contingencies

Specific Loss Contingencies

Noncompliance with donor or grantor restrictions

Allowance for uncollectible receivables

Expropriation of assets

Claims-made insurance policies

Litigation and claims

Joint and several liability

Uninsured risks


Gain Contingencies

Accounting for Uncertainty in Income Taxes (FASB ASC 740-10)

Disclosure Requirements

Loss Contingencies

Certain significant risks and uncertainties

Description/Examples of Required Disclosures

Nature of operations

Estimates/certain significant estimates

Current vulnerability caused by certain concentrations

Going concern contingencies



The accounting requirements for contingencies are contained primarily in FASB ASC 450. A contingency is an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur. Resolution of the uncertainty may confirm the acquisition of an asset, the reduction of a liability, the loss or impairment of an asset, or the incurrence of a liability. (FASB ASC 450-10-05-5)

Not-for-profit organizations use the same rules for recording and disclosing contingencies as commercial entities. In addition to all of the contingencies that face commercial enterprises, not-for-profit organizations often provide ...

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