U.S. GAAP, Codification of Accounting Standards, ASC - Accounting Standards Codification by FASB

U.S. GAAP Codification of Accounting Standards

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Accounting Standards, ASC

U.S. GAAP Codification of Accounting Standards
Codification Topic 450: Contingencies

U.S. GAAP Codification, Accounting Standards ASC,

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Codification Topic 450
Contingencies

Contingencies
1. Gain contingency
--> a gain will incur if certain future events occur or not occur
2. Loss contingency
--> a loss will incur if certain future events occur or not occur

A loss contingency
1. if a loss is "probable" --> recognize in the financial statements
2. if a loss is "reasonably possible" --> disclose in the notes
3. if the possibility of a loss is "remote" --> disclosure is not required

A gain contingency
1. a gain contingency is not recognized in the financial statements
2. if a gain contingency is disclosed in the notes
--> should avoid misleading implications about realization

International Financial Reporting Standards (IFRS)

IAS 37: Provisions, contingent liabilities and contingent assets