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Chapter 2 — Loss Contingencies and Commitments

2.1 Overview

2.1 Overview

ASC 450 defines a loss contingency as “[a]n existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur.” Resolution of uncertainty in the context of a loss contingency may confirm the loss, the impairment of an asset, or the incurrence of a liability. This chapter provides an overview of the scoping, recognition, measurement, and disclosure requirements for loss contingencies, along with certain interpretive guidance on accounting for them.