KPMG explains how an entity's management performs a going concern assessment and makes appropriate disclosures. Deloittes insights into and interpretations of the accounting Click here to extend your session to continue reading our licensed content, if not, you will be automatically logged off. For more information about our organization, please visit ey.com. EY is a global leader in assurance, consulting, strategy and transactions, and tax services. Inventory (updated 31 March 2020) Net realizability . We use cookies to personalize content and to provide you with an improved user experience. Refer to Appendix D of the publication for a summary of the updates. Please refer to your advisors for specific advice. An entity may choose how to classify business interruption insurance recoveries in the statement of operations, as long as that classification is not contrary to existing generally accepted accounting principles (GAAP). Disclosure of the nature of an accrual made pursuant to the provisions of paragraph 450-20-25-2, and in some circumstances the amount accrued, may be necessary for the financial statements not to be misleading. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. For more information about our organization, please visit ey.com. If you have any questions pertaining to any of the cookies, please contact us us_viewpoint.support@pwc.com. remember settings), Performance cookies to measure the website's performance and improve your experience, Marketing/Targeting cookies which are set by third parties with whom we execute marketing campaigns and allow us to provide you with content relevant to you. The insights and services we provide help to create long-term value for clients, people and society, and to build trust in the capital markets. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. For more information about our organization, please visit ey.com. As discussed in, There are three separate potential recognition, presentation and disclosure outcomes with regard to loss contingencies. In addition to cookies that are strictly necessary to operate this website, we use the following types of cookies to improve your experience and our services: Functional cookies to enhance your experience (e.g. PwC. Subscription required for downloading, Therefore, a reporting entity is typically required to accrue and present the gross amount of a loss even if it purchased insurance to cover the loss. EY | Assurance | Consulting | Strategy and Transactions | Tax. EY | Assurance | Consulting | Strategy and Transactions | Tax. However, laws in certain jurisdictions (especially certain state laws related to workers' compensation) may dictate that a reporting entity is relieved from being the primary obligor when it purchases insurance policies for certain claims, because the insurer has assumed that role. Reporting entities are required to describe all significant accounting policies in the financial statements. hJ0_ez0d4]BEdf$eHX` uD e~ioytgQUC'[7fF%#d%Pf[SU-^G/RES2{wG]~xN>xR`|U=M.$]d S  EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. EY is a global leader in assurance, consulting, strategy and transactions, and tax services. Select a section below . We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. Welcome to Viewpoint, the new platform that replaces Inform. US pandemic response and relief funding proactively mitigating fraud, waste and abuse, The COO Imperative: How human emotions can unlock supply chain success, 2023 Global economic outlook: Transforming uncertainty into opportunity, Select your location Close country language switcher. One way to alleviate some of this tension is to aggregate losses. Reporting entities often manage risk by purchasing insurance. remember settings), Performance cookies to measure the website's performance and improve your experience, Marketing/Targeting cookies which are set by third parties with whom we execute marketing campaigns and allow us to provide you with content relevant to you. The SEC staff has accepted this approach, which enables users to have sufficient data, but does not provide such specific information that it could prejudice a legal matter. Cybersecurity, strategy, risk, compliance and resilience, Value creation, preservation and recovery, Explore Transactions and corporate finance, Climate change and sustainability services, Strategy, transaction and transformation consulting, Real estate, hospitality and construction, How blockchain helped a gaming platform become a game changer, How to use IoT and data to transform the economics of a sport, M&A strategy helped a leading Nordic SaaS business grow. In addition, an employer's legal obligation is not altered if the purchased insurance contract includes all claims handling and direct contact with employees. We bring together extraordinary people, like you, to build a better working world. Please seewww.pwc.com/structurefor further details. See Appendix D of the publication for a summary of the updates. Select a section below and enter your search term, or to search all click By continuing to browse this site, you consent to the use of cookies. Link copied. If some amount within the range of loss appears at the time to be a better estimate than any other amount within the range, that amount shall be accrued. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. endstream endobj 187 0 obj <>stream contributions received by not-for-profits or ASC 450-30 for gain contingencies. practice. The costs of services performed by others in connection with the research and development activities of an entity, including research and development conducted by others [on] behalf of the entity, shall be included in research and development costs. These materials were downloaded from PwC's Viewpoint (viewpoint.pwc.com) under license. FSP Corp files a property and casualty claim with its insurer for recovery of $6 million. Deloitte US | Audit, Consulting, Advisory, and Tax Services version, On the Roadmap Series Contingencies, Loss Recoveries, and Guarantees Roadmap Contingencies, Loss Recoveries, and Guarantees (April 2022) View the PDF version (viewable without subscription): Subscription required for downloading, copying, or printing. remember settings), Performance cookies to measure the website's performance and improve your experience, Marketing/Targeting cookies which are set by third parties with whom we execute marketing campaigns and allow us to provide you with content relevant to you. Please see www.pwc.com/structure for further details. CONTINUE. Once you have viewed this piece of content, to ensure you can access the content most relevant to you, please confirm your territory. remember settings), Performance cookies to measure the website's performance and improve your experience, Marketing/Targeting cookies which are set by third parties with whom we execute marketing campaigns and allow us to provide you with content relevant to you. Determining which accounting policies are considered significant is a matter of management judgment. Other reporting entities choose to include this information in a "Significant Accounting Policies" footnote, as described in. Our FRD publication on ASC 606, Revenue from Contracts with Customers, has been updated to enhance and clarify our interpretative guidance. Cybersecurity, strategy, risk, compliance and resilience, Value creation, preservation and recovery, Explore Transactions and corporate finance, Climate change and sustainability services, Strategy, transaction and transformation consulting, Real estate, hospitality and construction, How blockchain helped a gaming platform become a game changer, How to use IoT and data to transform the economics of a sport, M&A strategy helped a leading Nordic SaaS business grow. endstream endobj startxref Use of this document for any commercial purposes is expressly prohibited. Jay and Heather discuss the scope of the commitments and contingencies guidance, including discussion of guarantees. Contents. Asking the better questions that unlock new answers to the working world's most complex issues. At EY, our purpose is building a better working world. If you have any questions pertaining to any of the cookies, please contact us us_viewpoint.support@pwc.com. Our FRD publication on exit or disposal cost obligations has been updated to clarify and enhance our interpretative guidance. . For more information about our organization, please visit ey.com. When no amount within the range is a better estimate than any other amount, however, the minimum amount in the range should be accrued. Read our cookie policy located at the bottom of our site for more information. The balance sheet classification of the accrual should consider when the contingency will be settled. Both categories are covered in this chapter. !H}{)bFvN()P*AKQ+V("*Jdo--ejx(BF{D&aI Please refer to your advisors for specific advice. Figure FSP 1-1 depicts the reporting periods required by the SEC for financial statements of public companies. other titles in Deloittes. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. Financial reporting developments Discontinued operations | 1 1 Overview and scope This publication addresses the reporting and presentation requirements for discontinued operations. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. PwC. Overview. %PDF-1.6 % Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. remember settings), Performance cookies to measure the website's performance and improve your experience, Marketing/Targeting cookies which are set by third parties with whom we execute marketing campaigns and allow us to provide you with content relevant to you. Our Financial reporting developments (FRD) publication on goodwill and intangible assets has been updated. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. 23.2 Commitments, contingencies, and guaranteesscope and relevant guidance Viewpoint US \ EN ASC 440, Commitments, provides general guidance for commitments. Select a section below and enter your search term, or to search all click inaGZ:9(. remember settings), Performance cookies to measure the website's performance and improve your experience, Marketing/Targeting cookies which are set by third parties . In addition to cookies that are strictly necessary to operate this website, we use the following types of cookies to improve your experience and our services: Functional cookies to enhance your experience (e.g. How do you move long-term value creation from ambition to action. hmo0?n:;T!+S)UCm 8 A %j$ c&%~Mh\v:S:{spEioDz As used in this document, Deloitte means Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Tax LLP, and Deloitte Financial Advisory Services LLP, which are separate subsidiaries of Deloitte LLP. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. EY is a global leader in assurance, consulting, strategy and transactions, and tax services. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. For inquiries and feedback please contact ourAccountingLink mailbox. Several pieces of guidance govern the presentation and disclosure of insurance recoveries: Most insurance proceeds are typically not refundable and do not require any further action from the insured; therefore, full or partial deferral of recognition of the proceeds should be rare. As discussed in, Reporting entities should also evaluate the need for accrual or disclosure of a loss contingency when broader circumstances indicate that the potential exists for claims against the company. Welcome to the Deloitte Accounting Research Tool (DART)! The income statement classification of the accretion of a discounted liability to its settlement amount is an accounting policy decision that should be consistently applied and disclosed. k0T)/,yu#*VW= DsMv&5o. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. 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