Wiley Practitioner's Guide to GAAP 2022

14ASC 275 RISKS AND UNCERTAINTIES

• Perspective and Issues
  • Subtopic
  • Scope and Scope Exceptions
• Definitions of Terms
• Concepts, Rules, and Examples
  • Certain Significant Estimates
    • Examples of Items That May Be Based on Estimates That Are Particularly Sensitive to Change in the Near Term (ASC 275-10-50-15)
  • Application of Disclosure Criteria
  • Other Sources

PERSPECTIVE AND ISSUES

Subtopic

ASU 275, Risks and Uncertainties, contains one subtopic:

• ASU 275-10, Overall, that provides guidance on disclosures of risks and uncertainties inherent in entity's operations and activities in cases where principal operations have not begun.

This topic recognizes that all entities face risk and uncertainty. The objective of ASC 275 is to provide guidelines that will enable the preparer to screen the many risks and uncertainties faced by entities and focus on those most useful to the readers of the particular entity's report—those that will enable the readers to assess the future cash flows and result of operations. Thus, the topic focuses on screening criteria for risks and uncertainties and the resulting required disclosures. It looks at risks and uncertainties arising internally as well as those arising from changes in the industry and economic environment.

Scope and Scope Exceptions

The guidance applies to all GAAP financial statements, interim and annual, but not to condensed or summarized financial statements. The guidance does not apply to risks and uncertainties associated ...