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.
Be sure to check out On the
Radar (also available as a stand-alone
publication), which briefly summarizes emerging
issues and trends related to the accounting and financial
reporting topics addressed in the Roadmap.
We hope that you find this
publication a valuable resource when considering the accounting guidance on loss
contingencies, gain contingencies, loss recoveries, and guarantees.
Footnotes
1For the full titles of standards, topics, and
regulations used in this publication, see Appendix B. For a list of abbreviations
used in this publication, see Appendix C.