Preface

We are pleased to present the 2025 edition of Contingencies, Loss Recoveries, and Guarantees. This Roadmap provides Deloitte’s insights into and interpretations of the accounting guidance in ASC 4501 on loss contingencies, gain contingencies, and loss recoveries and addresses the accounting guidance in ASC 460 on guarantees.

Although the guidance in ASC 450 has not changed significantly for decades, the application of the existing framework remains challenging at times because an entity may be required to use significant judgment in applying this guidance (e.g., legal interpretations are likely to be needed). Similarly, although the guidance in ASC 460 has not changed significantly for two decades, it may remain challenging to apply given the complexity of determining whether a guarantee is within the scope of ASC 460 as well as how guarantees should be accounted for in periods after their initial recognition and measurement.

In addition to summarizing the accounting framework in ASC 450 and ASC 460 and providing an in-depth discussion of key concepts, this Roadmap includes examples to illustrate how these concepts may be applied in practice. This publication is not, however, a substitute for the exercise of professional judgment, which is often essential to applying the requirements of ASC 450 and ASC 460, or for consulting with Deloitte professionals on complex accounting questions and transactions.

We hope that you find this publication a valuable resource when considering the accounting guidance on loss contingencies, gain contingencies, loss recoveries, and guarantees.