5.1 Overview

ASC 460 addresses the accounting and disclosure requirements for guarantors. The objective of the guidance in ASC 460 is to achieve transparency in a guarantor’s financial reporting about the obligations and risks related to issuing guarantees. This objective is achieved by providing informative disclosures about the nature and amount of guarantees in the guarantor’s financial statements as well as by helping ensure comparability between guarantees issued with a separately identified premium (i.e., guarantees for which the guarantor receives consideration in exchange for the issuance of the guarantee) and guarantees issued without a separately identified premium. ASC 460 applies to all entities.