Wiley Not-for-Profit GAAP 2020

23CONTINGENCIES

• 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
    • Guarantees
  • 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
    • Guarantees

PERSPECTIVE AND ISSUES

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 ...