# ASC Topic 275: Risks and Uncertainties Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/275/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:21:55.847Z to 2026-09-09T23:22:31.368Z Record version: sha256:fe212a550db3b6259a21e659f2de8ac65f164dd1d8de7e4bfe7d1d5b07950d7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 275 governs disclosure of risks and uncertainties that exist at the balance sheet date. The general Subtopic (275-10) requires all entities to disclose four things in the basic financial statements — nature of operations (or, if principal operations have not commenced, current activities), the pervasive use of management's estimates, certain significant estimates, and current vulnerability from certain concentrations — but only when screening criteria are met: generally that it is at least reasonably possible a change or severe impact will occur in the near term and the effect would be material or severe (275-10-50-1; 50-8; 50-16). The industry Subtopic (275-912) layers on incremental disclosures for federal government contractors exposed to the government's unilateral right to terminate for convenience, requiring recognition only of the reasonably estimable portions of a termination claim with the remainder disclosed. The core idea is selectivity: ASC 275 is a disclosure-only standard that does not change recognition or measurement, and it expressly excludes risks such as management/key personnel, proposed regulatory or accounting changes, internal control weaknesses, and acts of God or war (275-10-15-4). Source downloaded (UTC): 2026-09-09T23:21:55.847Z to 2026-09-09T23:22:20.205Z Record version: sha256:199e45e557006c110078addbf96f397c27ef3de2693b628b674972c0920db2e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-10: Risks and Uncertainties — Overall ### Machine-generated study aids ```json { "summary": "ASC 275-10 requires all entities to disclose, in the basic financial statements, information about risks and uncertainties existing at the balance sheet date in four areas: nature of operations (or, if principal operations have not commenced, current activities), the pervasive use of management estimates, certain significant estimates, and current vulnerability due to certain concentrations (275-10-50-1). The hallmark of the Subtopic is selectivity — disclosure is triggered only when specified screening criteria are met, generally when it is at least reasonably possible that a change or severe impact will occur in the near term and the effect would be material or severe (275-10-50-8; 275-10-50-16). It excludes risks from management/key personnel, proposed regulatory or accounting changes, internal control deficiencies, and acts of God, war, or sudden catastrophes (275-10-15-4).", "key_points": [ "Four required disclosure areas, all in the basic financial statements: nature of operations (including activities if principal operations have not commenced), use of estimates, certain significant estimates, and current vulnerability due to certain concentrations (275-10-50-1).", "Nature of operations disclosure must describe major products/services, principal markets and their locations, and, if the entity operates in more than one business, the relative importance of each and the basis (assets, revenues, or earnings); it need not be quantified (275-10-50-2), and an entity that has not commenced principal operations describes its current activities and what they are directed toward (275-10-50-2A).", "Financial statements must include an explanation that preparation under GAAP requires the use of management's estimates (275-10-50-4; illustrated at 275-10-55-6).", "A significant estimate must be disclosed when known information available before issuance indicates both that (a) it is at least reasonably possible the estimate of the effect of a condition existing at the balance sheet date will change in the near term due to future confirming events and (b) the effect of the change would be material (275-10-50-8); the disclosure states the nature of the uncertainty and the near-term reasonable possibility, and for Topic 450 loss contingencies also an estimate of possible loss or range or a statement that none can be made (275-10-50-9).", "Disclosure of a significant estimate does not depend on the amount recognized — a small or zero recorded amount does not excuse disclosure if a different estimate would have had a material effect (275-10-50-14); examples of sensitive estimates are listed at 275-10-50-15.", "Concentrations described in 275-10-50-18 (customer/supplier/lender/grantor/contributor volume; revenue from particular products, services or fund-raising events; sources of supply, labor, licenses; market or geographic area) must be disclosed if the concentration exists at the balance sheet date, makes the entity vulnerable to a near-term severe impact, and it is at least reasonably possible the triggering events will occur in the near term (275-10-50-16); loss of a customer, grantor, or contributor and disruption of operations outside the home country are always deemed at least reasonably possible.", "Specific quantitative disclosures are required for labor subject to collective bargaining agreements (percentage of labor force covered and percentage expiring within one year) and for operations outside the home country (carrying amounts of net assets and geographic areas) (275-10-50-20)." ], "categories": [ "Disclosure", "Financial statement presentation", "Contingencies and guarantees", "Presentation" ], "audience_level": "intermediate", "student_note": "This is the source of the boilerplate \"use of estimates\" note and concentration-of-credit/customer disclosures you see in almost every set of financial statements; the common mistake is assuming a small or zero recorded balance excuses disclosure (275-10-50-14) or confusing ASC 275's near-term \"reasonably possible change in estimate\" trigger with ASC 450's loss-contingency trigger — the two are separate and additive.", "related_topics": [ "450-20", "280-10", "855-10", "360-10", "825-10", "270-10" ], "key_concepts": [ "risks and uncertainties disclosure", "nature of operations", "use of estimates", "significant estimates", "near-term severe impact", "concentrations", "reasonably possible", "group concentrations" ] } ``` Source downloaded (UTC): 2026-09-09T23:21:55.847Z to 2026-09-09T23:21:55.847Z Record version: sha256:98eac33ae344bfcf8a40cbdd23bf53507d5efd58e48a03810546229dce53f770 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/275/10/#00-status) SEC content: no ##### [275-10-00-1](https://asc.understandingaccounting.org/asc/275/10/#275-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:55.847Z to 2026-09-09T23:21:55.847Z Record version: sha256:a8b176a5b0a0d026a36f52d6e6b675b2fdc05af1c4f3c3a5dc15a8d86e294d61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Condensed StatementsAddedAccounting Standards Update No. 2025-1112/08/2025
ContractAddedAccounting Standards Update No. 2014-0905/28/2014
CustomerAddedAccounting Standards Update No. 2014-0905/28/2014
Fair Value (3rd def.)AddedAccounting Standards Update No. 2012-0410/01/2012
Net Realizable ValueAddedAccounting Standards Update No. 2015-1107/22/2015
Performance ObligationAddedAccounting Standards Update No. 2014-0905/28/2014
Reasonably PossibleAddedAccounting Standards Update No. 2016-1912/14/2016
RevenueAddedAccounting Standards Update No. 2014-0905/28/2014
Transaction PriceAddedAccounting Standards Update No. 2014-0905/28/2014
275-10-05-2AmendedAccounting Standards Update No. 2014-1006/10/2014
275-10-05-6AmendedAccounting Standards Update No. 2012-0410/01/2012
275-10-05-7AmendedAccounting Standards Update No. 2015-1107/22/2015
275-10-05-7AmendedAccounting Standards Update No. 2014-0905/28/2014
275-10-15-3AmendedAccounting Standards Update No. 2025-1112/08/2025
275-10-15-6AmendedMaintenance Update 2016-05 (PDF)04/12/2016
275-10-50-1AmendedAccounting Standards Update No. 2014-1006/10/2014
275-10-50-2AmendedAccounting Standards Update No. 2014-1006/10/2014
275-10-50-2AAddedAccounting Standards Update No. 2014-1006/10/2014
275-10-50-6AmendedAccounting Standards Update No. 2016-1912/14/2016
275-10-50-8AmendedAccounting Standards Update No. 2016-1912/14/2016
275-10-55-2AmendedAccounting Standards Update No. 2014-1006/10/2014
275-10-55-3AAddedAccounting Standards Update No. 2014-1006/10/2014
275-10-55-3BAddedAccounting Standards Update No. 2014-1006/10/2014
275-10-55-9AmendedAccounting Standards Update No. 2016-1912/14/2016
275-10-60-1SupersededMaintenance Update 2018-02 (PDF)02/02/2018
275-10-60-2AmendedAccounting Standards Update No. 2025-1112/08/2025
275-10-60-3AAddedAccounting Standards Update No. 2012-0410/01/2012
275-10-60-7AmendedAccounting Standards Update No. 2014-0905/28/2014
275-10-60-9SupersededAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:f2e4f28bd235f22a7cd1b48c191c6e19eddfc4db45abdfc6dffeb71e066d3096 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/275/10/#05-overview-and-background) SEC content: no ##### [275-10-05-1](https://asc.understandingaccounting.org/asc/275/10/#275-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:9de29fa776874a3419669f5eff541b3e775b72f69ed22ad2e82644223a08d83c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial statements provide information about certain current conditions and trends that help users in predicting reporting entities' future cash flows and results of operations. The quality of users' predictions depends to a significant degree on their assessment of the risks and uncertainties inherent in entities' operations and of the information about those operations that financial reporting provides. ##### [275-10-05-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:39114595033e7cb81e272abbc4545a045c50365fba2b15454042114dee6d8145 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The central feature of this Subtopic's disclosure requirements is selectivity: specified criteria serve to screen the host of risks and uncertainties that affect every entity so that required disclosures are limited to matters significant to a particular entity. The disclosures focus primarily on risks and uncertainties that could significantly affect the amounts reported in the financial statements in the [near term](https://asc.understandingaccounting.org/glossary/n/#near-term "A period of time not to exceed one year from the date of the financial statements.") or the near-term functioning of the reporting entity. The risks and uncertainties this Subtopic addresses can stem from any of the following: 1. a The nature of the entity's operations, including the activities in which the entity is currently engaged if principal operations have not commenced 2. b The use of estimates in the preparation of the entity's financial statements 3. c Significant concentrations in certain aspects of the entity's operations. ##### [275-10-05-3](https://asc.understandingaccounting.org/asc/275/10/#275-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:c811b5fb2f12a0e1379c1644019cf921ff9941e033c0a6b1da2c87156eec6191 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic does not prohibit disclosure of matters it does not require to be disclosed either because they do not meet the specified screening criteria or because they relate to risks and uncertainties that are outside the scope of this Subtopic. #### Nature of Operations ##### [275-10-05-4](https://asc.understandingaccounting.org/asc/275/10/#275-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:d428de789b7e0e039832da68294feea7110b03cfe53cfc3dd1a8c8b727173deb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosure of the locations of a business entity's or not-for-profit entity's (NFP's) principal markets provides information useful in assessing risks and uncertainties related to the environments in which the entity operates. The risks and the uncertainties associated with selling products and services in various regions in the United States may differ significantly. And they do differ significantly from the risks and the uncertainties in selling products and services outside the United States. Knowing those environments in which an entity sells its products or provides services helps users of financial statements to assess certain risks based on day-to-day national and world events. ##### [275-10-05-5](https://asc.understandingaccounting.org/asc/275/10/#275-10-05-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:ae042b769a1a5369838b2b537fd5feb6f422cefd58ca50d0822a939749bf4561 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information about the nature of operations is helpful because the various kinds of businesses in which reporting entities operate have diverse degrees and kinds of risks. Certain of these risks are inherent to the business in which an entity is engaged. By knowing the nature of an entity's business and the principal markets for its products or services, a financial statement user is alerted, indirectly, about the risks common to that business. #### Use of Estimates in the Preparation of Financial Statements ##### [275-10-05-6](https://asc.understandingaccounting.org/asc/275/10/#275-10-05-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:27cd1a63d99e3af787e6ee6a3e73ca4837b0264b9841d90547ef0ae07de223f8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There is a need to communicate explicitly to users of financial reports that the inescapable use of estimates in the preparation of financial information, including the estimation of [fair values](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") for assets carried at such a basis, results in the reporting of values that are approximations rather than exact amounts. If users understand better the inherent limitations on precision in financial statements, they will be better able to make decisions. ##### [275-10-05-7](https://asc.understandingaccounting.org/asc/275/10/#275-10-05-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:5e669d1ec2c6e2b8438fc62daa56305a8cb4e9dd402eb8e96b0b542ca72fbfd9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimates inherent in the current financial reporting process inevitably involve assumptions about future events. For example, estimating and constraining estimates of variable consideration to be included in the [transaction price](https://asc.understandingaccounting.org/glossary/t/#transaction-price "The amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.") for a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with a [customer](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration.") in accordance with paragraphs [606-10-32-5 through 32-14](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-5) and measuring progress toward complete satisfaction of a [performance obligation](https://asc.understandingaccounting.org/glossary/p/#performance-obligation "A promise in a contract with a customer to transfer to the customer either: A good or service (or a bundle of goods or services) that is distinct A series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer.") in accordance with paragraphs [606-10-25-31 through 25-37](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-31) . For another example, carrying inventories measured using first-in, first-out (FIFO) at the lower of cost and [net realizable value](https://asc.understandingaccounting.org/glossary/n/#net-realizable-value "Estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.") is based on an assumption that there will be sufficient demand for that product in the future to be able to sell the quantity on hand without incurring losses on the sales or, if net realizable value is used, that it can be estimated. Making reliable estimates for those matters is often difficult even in periods of economic stability; it is more so in periods of economic volatility. Although many users of financial statements are aware of that aspect of financial reporting, others often assume an unwarranted degree of reliability in financial statements. The disclosure required by this Subtopic should help dispel any of those erroneous assumptions. #### Current Vulnerability Due to Certain Concentrations ##### [275-10-05-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-05-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:21:58.399Z to 2026-09-09T23:21:58.399Z Record version: sha256:675a12bb7ae5dedecf3c7a5808baafd7e2ee07502520da028e7874148ef47c06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on disclosure of current vulnerability due to certain concentrations but stops short of requiring disclosure of all concentrations. Source downloaded (UTC): 2026-09-09T23:22:01.770Z to 2026-09-09T23:22:01.770Z Record version: sha256:1998405dc186ad7e1c0fd61e21e0e613bd709d20367008ff865df20053f53a0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/275/10/#10-objectives) SEC content: no ##### [275-10-10-1](https://asc.understandingaccounting.org/asc/275/10/#275-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:01.770Z to 2026-09-09T23:22:01.770Z Record version: sha256:cd9ea3d5de8eb338b962fabdf5ffaf093cc834fc81722460936641d6f7229bfc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosing information to help users assess major risks and uncertainties is consistent with the established objectives of financial reporting. Source downloaded (UTC): 2026-09-09T23:22:03.852Z to 2026-09-09T23:22:03.852Z Record version: sha256:0aa5b0e4cd7f9683519b15bb7f97d18e8484ea6c886c10a4a2741f8dca797470 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/275/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [275-10-15-1](https://asc.understandingaccounting.org/asc/275/10/#275-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:03.852Z to 2026-09-09T23:22:03.852Z Record version: sha256:33927bc7223de0eb318cd81a2443be0169b7d372f5c6135c3de3ab043d676bd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for the Risks and Uncertainties Topic. #### Entities ##### [275-10-15-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:03.852Z to 2026-09-09T23:22:03.852Z Record version: sha256:d6a22be514118f08df2b19e75cc0bc565d5c78804e335149d3c89dcd90f0135d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Risks and Uncertainties Topic applies to all entities. #### Other Considerations ##### [275-10-15-3](https://asc.understandingaccounting.org/asc/275/10/#275-10-15-3) Pending content: yes Source downloaded (UTC): 2026-09-09T23:22:03.852Z to 2026-09-09T23:22:03.852Z Record version: sha256:b7a32687435182d035cdc5f03625c8e847c2b6f6f28a3e95e1c53f9bd8705754 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Risks and Uncertainties Topic applies to financial statements prepared in conformity with generally accepted accounting principles (GAAP) and applies to all entities that issue such statements. While the guidance in this Topic applies to complete interim financial statements, it does not apply to condensed or summarized interim financial statements. If comparative financial statements are presented, the disclosure requirements apply only to the financial statements for the most recent fiscal period presented. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)The guidance in the Risks and Uncertainties Topic applies to financial statements prepared in conformity with generally accepted accounting principles (GAAP) and applies to all entities that issue such statements. While the guidance in this Topic applies to complete interim financial statements, it does not apply to [condensed statements](https://asc.understandingaccounting.org/glossary/c/#condensed-statements "(P) December 16, 2027; (N) December 16, 2028 270-10-65-1 Financial statements that are presented at a level that is more aggregated than the annual financial statements or have limited notes subject to the disclosure requirements in Topic 270 or both. (U.S. Securities and Exchange Commission [SEC] registrants are required to consider the guidance in paragraph 270-10-S45-2. See Regulation S-X Rule 10-01 [17 CFR 210.10-01] and Regulation S-X Rule 8-03 [17 CFR 210.8-03].)"). If comparative financial statements are presented, the disclosure requirements apply only to the financial statements for the most recent fiscal period presented. ##### [275-10-15-4](https://asc.understandingaccounting.org/asc/275/10/#275-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:03.852Z to 2026-09-09T23:22:03.852Z Record version: sha256:c56d3b26e1bcd305c193ae5d1d7d102042fdde5ec8a2f93f4551e003b1898763 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure requirements do not encompass risks and uncertainties that might be associated with any of the following: 1. a Management or key personnel 2. b Proposed changes in government regulations 3. c Proposed changes in accounting principles 4. d Deficiencies in the internal control structure 5. e The possible effects of acts of God, war, or sudden catastrophes. ##### [275-10-15-5](https://asc.understandingaccounting.org/asc/275/10/#275-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:03.852Z to 2026-09-09T23:22:03.852Z Record version: sha256:174026df42603bf6cc6b30c84afe309d1d8f518da06d7fafc34a42427893feec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain disclosure requirements in this Topic supplement the requirements of other authoritative Topics. In many cases, however, the disclosure requirements in this Topic, particularly those relating to certain significant estimates, will be met or partly met by compliance with such other Topics. ##### [275-10-15-6](https://asc.understandingaccounting.org/asc/275/10/#275-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:03.852Z to 2026-09-09T23:22:03.852Z Record version: sha256:0608f328020289b1817b64d3b7c822b668618e74bb77b359ff01d080cfe2a0be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure requirements of this Topic in many circumstances are similar to or overlap the disclosure requirements in other Topics, for example, Topic 450 and, for public entities, Subtopic 280-10. The disclosure requirements of this Topic in many circumstances also are similar to or overlap the disclosure requirements of the Securities and Exchange Commission (SEC). This Topic does not alter the requirements of any other Topic or any SEC requirement. Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:c903ccece4bdaa301684590b2d6ca5c648a4b1dc1d4ebb0f77391d7cb88373fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/275/10/#50-disclosure) SEC content: no ##### [275-10-50-1](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:cb50b9398e126791e7754d586b259b9e890e0f8a356571560d0dbe483a3e269b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the disclosures required by this Subtopic shall be included in the basic financial statements. Reporting entities shall make disclosures in their financial statements about the risks and uncertainties existing as of the date of those statements in the following areas: 1. a Nature of operations , including the activities in which the entity is currently engaged if principal operations have not commenced 2. b Use of estimates in the preparation of financial statements 3. c Certain significant estimates 4. d Current vulnerability due to certain concentrations. These four areas of disclosure are not mutually exclusive. The information required by some may overlap. Accordingly, the disclosures required by this Subtopic may be combined in various ways, grouped together, or placed in diverse parts of the financial statements, or included as part of the disclosures made pursuant to the requirements of other Topics. #### Nature of Operations/Activities ##### [275-10-50-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:6aff5260ad706c05d050bc0db98162e2de91aebe133f9d5d77ef5a6fb8c67ad3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity has commenced planned principal operations, the entity's financial statements shall include a description of the major products or services the reporting entity sells or provides and its principal markets, including the locations of those markets. If the entity operates in more than one business, the disclosure also shall indicate the relative importance of its operations in each business and the basis for this determination—for example, assets, revenues, or earnings. Not-for-profit entities' (NFPs') disclosures should briefly describe the principal services performed by the entity and the revenue sources for the entity's services. Disclosures about the nature of operations or activities need not be quantified; relative importance could be conveyed by use of terms such as predominately, about equally, or major and other. ##### [275-10-50-2A](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-2A) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:f0571fcd8fb89fd50dc0290d7ccbb2cca9ce770c6b77aadeb3ce91c4010f56b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that has not commenced principal operations shall provide disclosures about the risks and uncertainties related to the activities in which the entity is currently engaged and an understanding of what those activities are being directed toward. ##### [275-10-50-3](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:607b5e5aa928d33ca3ebfe4c3a6f4b476f5b57999f2839719f081240835179c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Examples 1 through 2 (paragraphs [275-10-55-2 through 55-5](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-2) ) for illustrations of disclosure requirements for nature of operations. #### Use of Estimates in the Preparation of Financial Statements ##### [275-10-50-4](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:2733f984db6be1d3b6ec77e85fbfc994bce811caa4bdc9cc40b3c10c0f8a4a08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial statements shall include an explanation that the preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires the use of management's estimates. ##### [275-10-50-5](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:073dda69c54855d3ba982acf2acd690da9f8497b24de57da6a33d76b16ee6d95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 3 (paragraph [275-10-55-6](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-6)) for an illustration of the disclosure requirements of the pervasiveness of estimates in the preparation of financial statements. #### Certain Significant Estimates ##### [275-10-50-6](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:0228a2ea0925f49fcb755777170b11d77b6cff45efd9829fba9905863a821ebb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires discussion of estimates when, based on known information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25), it is [reasonably possible](https://asc.understandingaccounting.org/glossary/r/#reasonably-possible "The chance of the future event or events occurring is more than remote but less than likely.") that the estimate will change in the [near term](https://asc.understandingaccounting.org/glossary/n/#near-term "A period of time not to exceed one year from the date of the financial statements.") and the effect of the change will be material. The estimate of the effect of a change in a condition, situation, or set of circumstances that existed at the date of the financial statements shall be disclosed and the evaluation shall be based on known information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25). ##### [275-10-50-7](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:7a3d83ada3bdef5813dde4d4fa120329bd2fab9163d30ed790f33118610b144a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Various Topics require disclosures about uncertainties addressed by those Topics. In particular, Subtopic 450-20 specifies disclosures to be made about contingencies that exist at the date of the financial statements. In addition to disclosures required by Topic 450 and other accounting Topics, this Subtopic requires disclosures regarding estimates used in the determination of the carrying amounts of assets or liabilities or in disclosure of gain or loss contingencies, as described below. ##### [275-10-50-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:c721cd6f7346bbf313e07605a24758dcf3a0c5a9b7a703ef79d4daaab9aab0de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosure regarding an estimate shall be made when known information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) indicates that both of the following criteria are met: 1. a It is at least reasonably possible that the estimate of the effect on the financial statements of a condition, situation, or set of circumstances that existed at the date of the financial statements will change in the near term due to one or more future confirming events. 2. b The effect of the change would be material to the financial statements. ##### [275-10-50-9](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:b7d051b7093bbb6833729b2ac4fc044a1f6ab8f9b84d4099d7939ae39cb0c948 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure shall indicate the nature of the uncertainty and include an indication that it is at least reasonably possible that a change in the estimate will occur in the near term. If the estimate involves a loss contingency covered by Subtopic 450-20, the disclosure also shall include an estimate of the possible loss or range of loss, or state that such an estimate cannot be made. Disclosure of the factors that cause the estimate to be sensitive to change is encouraged but not required. The words reasonably possible need not be used in the disclosures required by this Subtopic. ##### [275-10-50-10](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:ea43f28122887275c7369a684f500b495e1ea3c74dfb333530eb4cd9bc569f30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many entities use risk-reduction techniques to mitigate losses or the uncertainty that may result from future events. If the entity determines that the criteria in paragraph [275-10-50-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-8) are not met as a result of risk-reduction techniques, the disclosures described in the preceding paragraph and disclosure of the risk-reduction techniques are encouraged but not required. ##### [275-10-50-11](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:e30083f52fbfee373ae0b72b2405c57cf901f620e4e6b763cafd6e5221730803 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic's disclosure requirements are separate from and do not change in any way the disclosure requirements or criteria of Topic 450; rather, the disclosures required under this Subtopic supplement the disclosures required under that Topic as follows: 1. a If an estimate (including estimates that involve contingencies covered by Topic 450) meets the criteria for disclosure under paragraph [275-10-50-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-8), this Subtopic requires disclosure of an indication that it is at least reasonably possible that a change in the estimate will occur in the near term; Topic 450 does not distinguish between near-term and long-term contingencies. 2. b An estimate that does not involve a contingency covered by Topic 450, such as estimates associated with long-term operating assets and amounts reported under profitable long-term contracts, may meet the criteria in paragraph [275-10-50-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-8). This Subtopic requires disclosure of the nature of the estimate and an indication that it is at least reasonably possible that a change in the estimate will occur in the near term. ##### [275-10-50-12](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:7c1e90bdaf58bc54b004d353f8f92d149dbe5112da298187438921799e1e912f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a loss contingency meets the criteria for disclosure under both Topic 450 and paragraph [275-10-50-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-8), this Subtopic requires disclosure that it is at least reasonably possible that future events confirming the fact of the loss or the change in the estimated amount of the loss will occur in the near term. ##### [275-10-50-13](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:b362bb37a12774c6d7449bb6e98bbade3d3d4772c3b9f276336a874c937f9e6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The requirements of paragraph [275-10-50-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-8) are applicable to long-lived assets whose value may become impaired in the near term (see Subtopic 360-10). ##### [275-10-50-14](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-14) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:31c545e07fcde738ed0730f2464915641f641838583de467c76e100a47e462bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether an estimate meets the criteria for disclosure under this Subtopic does not depend on the amount that has been reported in the financial statements, but rather on the materiality of the effect that using a different estimate would have had on the financial statements. Simply because an estimate resulted in the recognition of a small financial statement amount, or no amount, does not mean that disclosure is not required under this Subtopic. ##### [275-10-50-15](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:ce8af8456f552f7595bb4de3ce704f1edbc9d5cc049caaadb58375074565b05a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of assets and liabilities and related revenues and expenses, and of disclosure of gain or loss contingencies included in financial statements that, based on facts and circumstances existing at the date of the financial statements, may be based on estimates that are particularly sensitive to change in the near term: 1. a Inventory subject to rapid technological obsolescence 2. b Specialized equipment subject to technological obsolescence 3. c Valuation allowances for deferred tax assets based on future taxable income 4. d Capitalized motion picture film production costs 5. e Capitalized computer software costs 6. f Deferred policy acquisition costs of insurance entities 7. g Valuation allowances for commercial and real estate loans 8. h Environmental remediation-related obligations 9. i Litigation-related obligations 10. j Contingent liabilities for obligations of other entities 11. k Amounts reported for long-term obligations, such as amounts reported for pensions and postemployment benefits 12. l Estimated net proceeds recoverable, the provisions for expected loss to be incurred, or both, on disposition of a business or assets 13. m Amounts reported for long-term contracts. The above list is not intended to be all-inclusive. See Section 275-10-60 for links to illustrations of the disclosure requirements that are contained in other Topics. ##### [275-10-50-15A](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-15A) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:201b63ae69d21fae4cb00c21523602b117bf7fd8b7e8c491c27a56406ae5423d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining whether disclosure about an estimate of the useful life of an intangible asset is required under paragraph [275-10-50-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-8), the criterion in item (b) of that paragraph shall be considered met if the effect of either of the following would be material to the financial statements, either individually or in aggregate by major intangible asset class: 1. a A change in the useful life of an intangible 2. b A change in the expected likelihood of renewal or extension of an intangible asset. #### Current Vulnerability Due to Certain Concentrations ##### [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:f4bbd06c97fb5d4243c3b8c413617802d63aa3e1c76ba79bb4468def504b0340 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Vulnerability from concentrations arises because an entity is exposed to risk of loss greater than it would have had it mitigated its risk through diversification. Such risks of loss manifest themselves differently, depending on the nature of the concentration, and vary in significance. Financial statements shall disclose the concentrations described in paragraph [275-10-50-18](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-18) if, based on information known to management before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25), all of the following criteria are met: 1. a The concentration exists at the date of the financial statements. 2. b The concentration makes the entity vulnerable to the risk of a near-term [severe impact](https://asc.understandingaccounting.org/glossary/s/#severe-impact "(Used in reference to current vulnerability due to certain concentrations.) A significant financially disruptive effect on the normal functioning of an entity. Severe impact is a higher threshold than material. Matters that are important enough to influence a user's decisions are deemed to be material, yet they may not be so significant as to disrupt the normal functioning of the entity. Some events are material to an investor because they might affect the price of an entity's capital stock or its debt securities, but they would not necessarily have a severe impact on (disrupt) the entity itself. The concept of severe impact, however, includes matters that are less than catastrophic. Matters that are catastrophic include, for example, those that would result in bankruptcy."). 3. c It is at least reasonably possible that the events that could cause the severe impact will occur in the near term. ##### [275-10-50-17](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-17) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:8031e975dfac2402d9528a2081fba11856f1e36ecb5c307efcff712aff221693 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires disclosure of certain defined concentrations known to management rather than a wider range of concentrations based on information of which management is reasonably expected to have knowledge. ##### [275-10-50-18](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-18) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:7ffc42178d319b9085c87a3570194833a7ceb3d88c67d5d17fee1aa5cf11b2de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Concentrations, including known group concentrations, described below require disclosure if they meet the criteria of paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16). (Group concentrations exist if a number of counterparties or items that have similar economic characteristics collectively expose the reporting entity to a particular kind of risk.) Some concentrations may fall into more than one of the following categories: 1. a Concentrations in the volume of business transacted with a particular customer, supplier, lender, grantor, or contributor. The potential for the severe impact can result, for example, from total or partial loss of the business relationship. For purposes of this Subtopic, it is always considered at least reasonably possible that any customer, grantor, or contributor will be lost in the near term. 2. b Concentrations in revenue from particular products, services, or fund-raising events. The potential for the severe impact can result, for example, from volume or price changes or the loss of patent protection for the particular source of revenue. 3. c Concentrations in the available sources of supply of materials, labor, or services, or of licenses or other rights used in the entity's operations. The potential for the severe impact can result, for example, from changes in the availability to the entity of a resource or a right. 4. d Concentrations in the market or geographic area in which an entity conducts its operations. The potential for the severe impact can result, for example, from negative effects of the economic and political forces within the market or geographic area. For purposes of this Subtopic, it is always considered at least reasonably possible that operations located outside an entity's home country will be disrupted in the near term. ##### [275-10-50-19](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-19) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:4d9eb60c7f00a97e4d20c4d3810e53777fba81e0b282a480fa0f48949d29a51d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Concentrations of financial instruments, and other concentrations not described in the preceding paragraph, are not addressed in this Subtopic. However, these other concentrations may be required to be disclosed pursuant to other Topics, such as Subtopic 825-10 . ##### [275-10-50-20](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-20) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:dbd652c1d0e2067dc57d1756963f43fb0b3e7c5a5c1e125f63b8bd9af0677824 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosure of concentrations meeting the criteria of paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16) shall include information that is adequate to inform users of the general nature of the risk associated with the concentration. For those concentrations of labor (see paragraph [275-10-50-18(c)](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-18)) subject to collective bargaining agreements and concentrations of operations located outside of the entity's home country (see paragraph [275-10-50-18(d)](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-18)) that meet the criteria in paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16), the following specific disclosures are required: 1. a For labor subject to collective bargaining agreements, disclosure shall include both the percentage of the labor force covered by a collective bargaining agreement and the percentage of the labor force covered by a collective bargaining agreement that will expire within one year. 2. b For operations located outside the entity's home country, disclosure shall include the carrying amounts of net assets and the geographic areas in which they are located. This Subtopic does not, however, prohibit entities from also stating in disclosures of concentrations related to customers, grantors, or contributors or operations located outside the entity's home country that the entity does not expect that the business relationship will be lost or does not expect that the foreign operations will be disrupted if such is the case. ##### [275-10-50-21](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-21) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:aac012b32433dda0e7985e9fd0538a23589a93cbd9b0b3cd27b685bc10d8f6d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Adequate information about some concentrations may already be presented in other parts of the financial statements. For example, adequate information about assets or operations located outside the entity's home country may be included in disclosures made to comply with Subtopic 280-10. In accordance with the guidance in this Subtopic, such information need not be repeated. ##### [275-10-50-22](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-22) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:a54e64eaad307c165c4a6773c0ff79137281f4c9d346ff823c5d9a3d2b86431b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Examples 2 and 4 through 8 (paragraphs [275-10-55-4](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-4) and [275-10-55-8 through 55-19](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-8) ) for illustrations of the disclosure requirements for current vulnerability due to certain concentrations. #### Application of Disclosure Criteria ##### [275-10-50-23](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-23) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:11.404Z to 2026-09-09T23:22:11.404Z Record version: sha256:119daecd1a3d12357a13d4a1284ebb04ec88f802f7dc58c3e7a93bd602917cc2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An assessment of whether a disclosure is required should not be found to be in error simply as a result of future events. For example, reporting a concentration not followed by a severe impact does not imply that the disclosure should not have been made, because something that has only a reasonably possible chance of occurring obviously might not occur. Similarly, the occurrence of a severe impact related to a concentration not disclosed in the prior-year financial statements would not suggest noncompliance with the requirements of this Subtopic if an appropriate judgment had been made that a near-term severe impact was not at least reasonably possible at the prior reporting date. In addition, a severe impact may arise from a concentration of which management did not have knowledge at the time the financial statements were issued. Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:37696d8d247e683d563d3e436af2067d07bd46c82c30ad6ab43823319cf65612 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/275/10/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [275-10-55-1](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:90837006cac2a3887e352387291ec5fa19db9428759f49438704bedcecdad6e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The kinds of disclosures required by this Subtopic are illustrated in this Section. Each consists of a situation in which the disclosure would likely be made or not made and a discussion of how and why the illustrative disclosure complies with the requirements of this Subtopic or why no disclosure is required by this Subtopic. Some of the concentrations described in the Examples may illustrate more than one of the categories of concentrations given in paragraph [275-10-50-18(a) through (d)](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-18). ##### [275-10-55-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:9469e5103c873fb0bbf702d4de4912ee5a0bbe374108bed91fefc368bccbac12 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures required by paragraph [275-10-50-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-2). Conglomerate, Inc. is a U.S.-based multinational entity. Conglomerate's principal lines of business are automotive products, aerospace products and technologies, textiles, and nonprescription health-care products. The principal markets for Conglomerate's automotive and aerospace products and technologies are European- and Far East-based industrial concerns. Textiles are sold primarily to U.S. clothing manufacturers, while nonprescription health-care products are sold to wholesale and retail distributors worldwide. The operations of Conglomerate in any one country are not significant in relation to its overall operations. The following illustrates disclosure of the nature of operations required by this Subtopic. - Conglomerate, Inc. is a multinational manufacturer and engineering concern. The entity's principal lines of business are automotive products, aerospace products and technologies, textiles, and nonprescription health-care products, all of which are about equal in size based on sales. The principal markets for the automotive and aerospace products and technologies are European- and Far East-based industrial concerns. Textiles are sold primarily to domestic clothing manufacturers, while nonprescription health-care products are sold primarily to wholesale and retail distributors worldwide. ##### [275-10-55-3](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:53392a929047251ba193ffc7a38fe0d40a4ff03db29c05ac5fcbbde282c8dfee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This disclosure provides all of the following: 1. a Information necessary for users not familiar with the operations of Conglomerate to identify and consider the broad risks and uncertainties associated with the businesses and markets in which it operates and competes. From the disclosures provided, financial statement users having a general knowledge of business matters should be able to assess that Conglomerate's product lines are subject to different and varied risks. Those financial statement users familiar with the businesses recognize the general risks associated with each of these businesses and their related markets. 2. b Information that facilitates the overall understanding of the financial information presented. This kind of disclosure could provide users with a basis for comparing an entity's financial information with that of competitors or with applicable industry statistics. 3. c Insight into the location of Conglomerate's principal markets, although on a broad scale. Because Conglomerate's markets are so diverse, it likely would not be useful to enumerate the specific locations of the entity's markets. For this reason, the manner in which the information is disclosed in the illustrative disclosure is sufficient to meet the broad objectives of this Subtopic. ##### [275-10-55-3A](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-3A) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:1d1b28f880fbc658a4981828df0307657463c6566d658e0bc94cedd6d6157c5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates one way to comply with the disclosures required by paragraph [275-10-50-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-2). NewCompany, Inc. (Company) is a business that has not commenced planned principal operations. The Company is designed to develop and manufacture specialized environmental test equipment for measuring air quality. The Company's first product is a rapid-result test kit to identify certain airborne contaminants in high-risk environments. The Company's activities since inception have consisted principally of acquiring technology patents, raising capital, and performing research and development activities. The following illustrates disclosure required by this Subtopic of the nature of activities for an entity that has not commenced principal operations. - NewCompany, Inc. (Company) is a business whose planned principal operations are the design, engineering, and manufacturing of air quality test equipment. The Company is currently conducting research and development activities to operationalize certain patented technology that the Company owns so it can manufacture rapid-result test kits for certain airborne contaminants in high-risk environments. - During the last year, the Company secured a research facility in Norwalk, Connecticut, which houses all of its employees and research and development activities. The Company also is in the process of raising additional equity capital to support the completion of its development activities to begin manufacturing the test kits as soon as possible. - The Company's activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company's current technology before another company develops similar technology and test kits. ##### [275-10-55-3B](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-3B) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:b24da5c762d53dca486f151bd536ad47aaf58eb6742fc7f037efef668b071822 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure in paragraph [275-10-55-3A](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-3A) provides all of the following: 1. a Information necessary for financial statement users not familiar with the activities of the Company to identify and consider the broad risks and uncertainties associated with businesses that have activities that are similar to those in which the Company is engaged. From the disclosures provided, financial statement users that have a general knowledge of business matters should be able to assess both of the following: 1. 1 That the Company's activities are subject to different and varied risks, including the risk that the entity may be affected by the rapidly changing and intensely competitive technology market 2. 2 That the Company is dependent on additional capital resources for the continuation and expansion of its business activities. 2. b Information that facilitates the overall understanding of the financial information provided. That kind of disclosure could provide users with a basis for understanding the Company's financial information and comparing that information with similar entities or other relevant statistics. ##### [275-10-55-4](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:86b04b3098d8f44292771ebd6e9d867b067f68275abaad35d9a10b66e81f3496 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures required by paragraphs [275-10-50-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-2) and [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16). Smith Corporation, formerly Smith Munitions Corporation, was founded in 1940. At that time, Smith's principal business was the design and manufacture of artillery ammunition and other explosives. In 1959, commensurate with the evolution of its principal business to the design, engineering, and manufacture of military aircraft for sale to the U.S. government, Smith changed its name to Smith Corporation. Smith has one factory, located in New York. The following illustrates disclosure of the nature of operations required by this Subtopic. - Smith Corporation is engaged principally in the design, engineering, and manufacturing of military aircraft and related peripheral equipment for sale primarily to the U.S. government. ##### [275-10-55-5](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:dd37f122d20676190e1cc1f829a07912ede97948845f50542de4fc509018f1b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This disclosure provides all of the following: 1. a Information needed by users who are not familiar with the operations of Smith Corporation to identify and consider the broad risks and uncertainties faced by all or most entities operating in a specific business or market, which in this case is the defense contracting business. From this disclosure, financial statement users having a general knowledge of business matters should know that Smith's business may be heavily affected by future changes in U.S. defense and foreign policies. 2. b Information that aids in the overall understanding of the other financial information presented. Certain accounting procedures involving estimation may apply only to particular industries or may be relevant in comparing a business entity's financial statements with those of business entities in other industries. 3. c Insight into the location of Smith's principal product markets and information about its current vulnerability due to concentrations. Users would be able to recognize and assess Smith's dependency on sales to the U.S. government (assuming the loss of the government as a customer would result in a [near-term](https://asc.understandingaccounting.org/glossary/n/#near-term "A period of time not to exceed one year from the date of the financial statements.") [severe impact](https://asc.understandingaccounting.org/glossary/s/#severe-impact "(Used in reference to current vulnerability due to certain concentrations.) A significant financially disruptive effect on the normal functioning of an entity. Severe impact is a higher threshold than material. Matters that are important enough to influence a user's decisions are deemed to be material, yet they may not be so significant as to disrupt the normal functioning of the entity. Some events are material to an investor because they might affect the price of an entity's capital stock or its debt securities, but they would not necessarily have a severe impact on (disrupt) the entity itself. The concept of severe impact, however, includes matters that are less than catastrophic. Matters that are catastrophic include, for example, those that would result in bankruptcy.") to Smith Corporation). ##### [275-10-55-6](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:c5208f307d710cd08665125ac7626c4d27e874198e435ae1dbc043851f8dfd0c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates disclosure of the pervasiveness of estimates in the financial statements of all reporting entities as required by paragraph [275-10-50-4](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-4). - The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. ##### [275-10-55-7](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:d5ed82a6971a79342306c8cb0129bb3f166b18f4391c0cdf365eb6ad5907fdb0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This disclosure is intended to inform users of the inherent uncertainties in measuring assets and liabilities and related revenues and expenses and contingent assets and liabilities, and that subsequent resolution of some matters could differ significantly from the resolution that is currently expected. Such disclosure alerts users that uncertainties are present in the financial statements of all reporting entities. ##### [275-10-55-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:2234a94cc89862d1dadb1a25834d83408e403b2b983da19137a51f05e058a5f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures required by paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16). Hi-Tech Corporation is a manufacturer of electronic equipment in which integrated circuits are an important component. Substantially all of Hi-Tech's customers require that only those vendors that meet quality criteria be used as sources for integrated circuits. Hi-Tech currently buys all of its integrated circuits from one manufacturer in the Far East, and no long-term supply contract exists. There are only a limited number of manufacturers of these particular integrated circuits, and a change of supplier could significantly disrupt the business due to the time it would take to locate and qualify a new vendor. The following illustrates the disclosure required by this Subtopic. - The entity currently buys all of its integrated circuits, an important component of its products, from one supplier. Although there are a limited number of manufacturers of the particular integrated circuits, management believes that other suppliers could provide similar integrated circuits on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would affect operating results adversely. ##### [275-10-55-9](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:9a3c1f4aed71b27ea8ef64639e7a7c623923725a5f9d4fff406cd3fdcafced4f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although other sources of supply of this particular kind of integrated circuit are currently available, the limited number of such sources and the time it takes to qualify new vendors makes Hi-Tech currently vulnerable to the risk of a near-term severe impact. Disclosure is required because it is considered at least [reasonably possible](https://asc.understandingaccounting.org/glossary/r/#reasonably-possible "The chance of the future event or events occurring is more than remote but less than likely."), based on information known to management before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25), that the events that could cause the severe impact will occur. ##### [275-10-55-10](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:5e08db635944eac9dedb44a510100314074e1d0f7aa1bcde0e4a300e2aef8605 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures required by paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16). Minnesota Company manufactures various products in which wheat is an important raw material. It currently buys 80 percent of its wheat from one supplier, but numerous alternate sources of supply are readily available on comparable terms. ##### [275-10-55-11](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:8db324e2e8fafa9eba60c1165b510b828580106d7a85a59742850f757589b701 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. No disclosure is required. ##### [275-10-55-12](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:e2028686227a6a15c065d2116a16fa593d3932129896892f6aeef50978452e0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The concentration exists at the date of the financial statements, and an inability to obtain wheat could result in a near-term severe impact. No disclosure is required, however, because numerous alternative suppliers are available and, therefore, it is not considered at least reasonably possible that events that could cause a near-term severe impact will occur. ##### [275-10-55-13](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:bd306ed47546e17a54656a35a787ff287a81fb0a6a904b3bf7ebe43d06d5a881 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures required by paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16). Felt Pharmaceutical Company is a national pharmaceutical manufacturer headquartered in Atlanta, Georgia. Felt markets a wide range of pharmaceutical products. One of its better-known name-brand products, a significant source of profits and cash flow, is an antibiotic on which there is a patent that will expire in six months. Competitors are preparing to enter the market with generic alternatives when Felt's patent expires, and the concentration therefore has the potential for a severe impact. The following illustrates the disclosure required by this Subtopic. - Felt Pharmaceutical Company is a national pharmaceutical manufacturer with sales throughout the United States. The patent on one of its major products expires next year. This product accounts for approximately one-third \[or "a significant portion"\] of the entity's revenues and a higher percentage of its gross profit. ##### [275-10-55-14](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-14) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:f7beeb50987585ae50689a6ac0b54bde12b54f74371274da6fb8604e938b3a56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure focuses on the nature of the business and on Felt's current vulnerability due to a concentration of its patented products. Disclosure is required because the concentration exists at the date of the financial statements, because the effect on Felt's cash flows and profitability of competitors entering the market when the patent expires could be a severe impact, and because it is considered at least reasonably possible that the events that could cause the severe impact will occur in the near term. Because the risk is evident from the description of the concentration, no further explanation of the risk is necessary. ##### [275-10-55-15](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:1ec66939c4f29aa2a22c269fb54f22a2260a2f21f09d4421265a3a9862cff481 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures required by paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16). Team Company is a manufacturer of industrial hardware. The contract with the union representing Team's labor force is due to expire in the coming year. Over the past 30 years, Team has, in rare instances, been affected by work stoppages in the course of contract negotiations; the stoppages have always been of short duration, and none has had a significant effect on Team's financial statements. Although management expects that there will initially be some differences between its offer to the union and union demands, based on preliminary discussions with union leaders, management believes it is very unlikely that those differences will result in a protracted conflict. ##### [275-10-55-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:3fe9f5be0c0ba663b92df9e515de72462019527f483c648cce0f8bce37ed24c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. No disclosure is required. ##### [275-10-55-17](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-17) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:5bdc5c927b2f317870a68caa51ea061e14f2f15fb85d62e363cbe691c9be9663 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although the concentration of labor exists at the date of the financial statements and it could result in a severe impact in the near term due to the potential of a protracted work stoppage, no disclosure is required because it is not considered at least reasonably possible in the light of past experience and current conditions that a protracted work stoppage will take place. ##### [275-10-55-18](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-18) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:3f2b6b22051a28e4ad4c2678090647e58b3228a2a4751e8718795b12528a6236 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures required by paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16). Offshore Productions, Inc., a Delaware corporation, designs and manufactures optical lenses, which it markets throughout the United States. Substantially all of its manufacturing operations are carried out in a single facility, which is located in Switzerland and which is owned by Offshore's subsidiary. Offshore does not carry insurance for risks of loss. Offshore's consolidated balance sheet includes $20 million representing the net assets of those operations. The following illustrates the disclosure required by this Subtopic. - Included in the entity's consolidated balance sheet at December 31, 20X4, are the net assets of the entity's manufacturing operations, all of which are located in a single facility in Switzerland and which total approximately $20 million. ##### [275-10-55-19](https://asc.understandingaccounting.org/asc/275/10/#275-10-55-19) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:15.046Z to 2026-09-09T23:22:15.046Z Record version: sha256:ab6896edd01583a14cfd343c5fb8b0f5ab72489a2aaac91a9a4bf6510cf84036 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of Offshore's specialized manufacturing capacity is concentrated in a single facility. As noted in paragraph [275-10-50-18](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-18), it is always considered at least reasonably possible that the use of a facility located outside of an entity's home country could be disrupted in the near term. Due to the specialized nature of the assets, it would not be possible to find replacement capacity quickly. Accordingly, loss of the facility could produce a near-term severe impact to Offshore. This disclosure informs financial statement users of that concentration of operations in a particular geographic area and informs them of the risks and uncertainties associated with the concentration. Because the concentration is one of operations located outside of Offshore's home country, the disclosure also sets forth the carrying amount of the net assets, as required by this Subtopic. Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:296ca246fe6e45d0dce89b961f1944dda11bbda89ab9097a94574dfc5d839229 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/275/10/#60-relationships) SEC content: no ##### [275-10-60-1](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:6438743332dd3d36f34277c9639dbf84968e4406d4b7d13b51c2596de3f0ffd6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Maintenance Update 2018-02](https://asc.understandingaccounting.org/updates/maintenance-updates-2018/). #### Interim Reporting ##### [275-10-60-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-2) Pending content: yes Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:bdf4b84c448c81a0df55e11a9c142192224f4a8d72deb799d7155cbdaf4cc9cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [270-10-50-6](https://asc.understandingaccounting.org/asc/270/10/#270-10-50-6) for guidance on disclosure of contingencies in summarized interim financial information of publicly traded entities. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)See paragraph [270-10-50-69](https://asc.understandingaccounting.org/asc/270/10/#270-10-50-69) for guidance on disclosure of contingencies in interim financial statements and notes in accordance with generally accepted accounting principles. #### Inventory ##### [275-10-60-3](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:f1ea45d2cd5c9201112421aafa8b2050ae43d44baae45b78774246fa4074bded Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraph [330-10-55-8](https://asc.understandingaccounting.org/asc/330/10/#330-10-55-8)) for an illustration of the kinds of disclosures required for risks and uncertainties related to inventory. #### Property, Plant, and Equipment ##### [275-10-60-3A](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-3A) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:42606558039abb70d6b3cd8c664667967c5df83526f5c400b3c995d3e22439df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 12 (paragraphs [360-10-55-50 through 55-54](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-50) ) for an illustration of the kinds of disclosures required for risks and uncertainties related to specialized manufacturing equipment. #### Asset Retirement and Environmental Obligations ##### [275-10-60-4](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:fb11732d4f151c605e041a4ece8fe326d4ac7583734af57bc7ca2dcca434044c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraph [410-30-55-7](https://asc.understandingaccounting.org/asc/410/30/#410-30-55-7)) for an illustration of the kinds of disclosures required for risks and uncertainties related to environmental remediation liabilities. #### Contingencies ##### [275-10-60-5](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:eee5e46a411957ef0f1b7a5da89cd0da458efa9f0c72eec995c514f124d129ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 3 (paragraphs [450-20-55-36](https://asc.understandingaccounting.org/asc/450/20/#450-20-55-36)) for an illustration of the kinds of disclosures required for risks and uncertainties related to loss contingencies. #### Guarantees ##### [275-10-60-6](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:d33e82fde7eb34d81ce1f7ce30ec5506f21d3491a398429e44ec17046ae3c030 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraph [460-10-55-25](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-25)) for an illustration of the kinds of disclosures required for risks and uncertainties related to guarantees of debt. #### Revenue Recognition ##### [275-10-60-7](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:afdfdc680b5a45ce01b7cd38fdd2d477667bab83e58d3bb4ce441830567ab579 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [606-10-50-1 through 50-23](https://asc.understandingaccounting.org/asc/606/10/#606-10-50-1) for disclosures of [revenue](https://asc.understandingaccounting.org/glossary/r/#revenue "Inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.") from [contracts](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with [customers](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration."). #### Income Taxes ##### [275-10-60-8](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:eab60c12505e432a0b55f74694b755bd9a67776e5c6479b8e44c16e2ddab34ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 31 (paragraph [740-10-55-218](https://asc.understandingaccounting.org/asc/740/10/#740-10-55-218)) for an illustration of the kinds of disclosures required for risks and uncertainties related to income taxes. ##### [275-10-60-9](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:fcfd7b757eb524e3e24015538cbc8cc4c7b4598315e8a2ec01d02f3c570931c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2012-04](https://asc.understandingaccounting.org/updates/asu-2012-04/). #### Not-for-Profit Entities ##### [275-10-60-10](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:7d68b6a433168f698627d52954ad26f932c0dbd5caa22f84f33089d2b52229f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 12 (paragraph [958-605-55-69](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-69)) for an illustration of the kinds of disclosures required for risks and uncertainties related to contributions. #### Software ##### [275-10-60-11](https://asc.understandingaccounting.org/asc/275/10/#275-10-60-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:17.586Z to 2026-09-09T23:22:17.586Z Record version: sha256:5b07b0dacb4013b7ede484bd68c5bcb42ddb8f0ec3ec5fc78add04a435d66447 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraph [985-20-55-23](https://asc.understandingaccounting.org/asc/985/20/#985-20-55-23)) for an illustration of the kinds of disclosures for risks and uncertainties related to capitalized software costs. Source downloaded (UTC): 2026-09-09T23:22:22.572Z to 2026-09-09T23:22:31.368Z Record version: sha256:e3dbc9cddd1fa67d9f27a399d6d47b2c60d0650af792bb8da42b89382734673c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912: Risks and Uncertainties — Contractors—Federal Government ### Machine-generated study aids ```json { "summary": "This Subtopic requires federal government contractors to make incremental disclosures about the risks and uncertainties arising from the government's unilateral right to terminate contracts for its convenience. The effect of a termination is reflected in the period the termination occurs (or earlier if it is a subsequent event attributable to balance-sheet-date conditions), with only the reasonably estimable portions of a termination claim recognized and the remainder disclosed. Controversial or undeterminable claim elements are stated at amounts estimated to be collectible or excluded and disclosed.", "key_points": [ "Effect may be given to the parts of a termination claim determinable with reasonable certainty, with note disclosure of the status of the remainder when a reasonable estimate cannot be made in time (275-912-50-2).", "Claim items of a known controversial nature shall be stated at the amount estimated to be collectible; parts too uncertain to be reasonably estimated are preferably not given effect, and if material, the circumstances shall be disclosed before the uncertainty is removed (275-912-50-3).", "In extreme circumstances involving undeterminable claims, consideration shall be given to delaying issuance of the financial statements until necessary data are available (275-912-50-3).", "A contract termination is reflected in the period it occurs, or earlier if it is a subsequent event before issuance attributable to conditions existing at the balance sheet date; the effective date of termination is when the contractor acquires the right to receive payment on the terminated portion (275-912-50-4).", "If information is insufficient to predict the effect of a very recent termination, the best available information shall be disclosed in the notes in conformity with Topic 450 (275-912-50-4).", "Significant items of a known controversial nature shall be disclosed in the notes even if ultimate amounts realizable are not determinable (275-912-50-5).", "If indicators (notice of possible termination, performance problems, procurement cutbacks) suggest a termination that would materially affect operations, the circumstances and potential effects shall be disclosed in the notes (275-912-50-6)." ], "categories": [ "Disclosure", "Contingencies and guarantees", "Industry-specific", "Presentation" ], "audience_level": "intermediate", "student_note": "Exam traps here are timing and measurement: the termination is recognized when the contractor acquires the right to payment (or earlier as a Type I subsequent event), and only reasonably estimable amounts are recorded — uncertain or controversial elements get disclosed, not accrued. Students often forget that mere indicators of a possible termination (not just an actual one) trigger disclosure if the effect would be material.", "related_topics": [ "912-10", "855-10", "450", "420-10", "275-10", "606" ], "key_concepts": [ "termination for convenience", "termination claim", "government contractor risk", "reasonable estimate", "subsequent events", "known controversial items", "note disclosure of potential termination" ] } ``` Source downloaded (UTC): 2026-09-09T23:22:22.572Z to 2026-09-09T23:22:22.572Z Record version: sha256:8aea5403d405e36fec6fa972cc8bcfc9ca82e56723c877c845a932919fcb6756 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/275/912/#00-status) SEC content: no ##### [275-912-00-1](https://asc.understandingaccounting.org/asc/275/912/#275-912-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:22.572Z to 2026-09-09T23:22:22.572Z Record version: sha256:efc8382e17c1bb0d8c0957ca65bffe18f5db523a8de9489139586ffd27f08269 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
912-275-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
912-275-50-1SupersededAccounting Standards Update No. 2014-0905/28/2014
912-275-50-2AmendedMaintenance Update 2016-11 (PDF)06/27/2016
912-275-50-4AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-09T23:22:25.275Z to 2026-09-09T23:22:25.275Z Record version: sha256:6f7f09427e5dce27edb0dd95a8732bcca5d44001ab3edd7b6eb63e17702ad17b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/275/912/#05-overview-and-background) SEC content: no ##### [275-912-05-1](https://asc.understandingaccounting.org/asc/275/912/#275-912-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:25.275Z to 2026-09-09T23:22:25.275Z Record version: sha256:917b207c3b1e37cabe45b03da0a92a68e61a6e3c6248f3befc6c7bcb6cda32be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance to government contractors related to incremental disclosures about risks and uncertainties associated with contracts terminated for the convenience of the government. Source downloaded (UTC): 2026-09-09T23:22:26.892Z to 2026-09-09T23:22:26.892Z Record version: sha256:3933b1bf2ce3394b57ecb41bccf9c1c9e3c13e8de185c7b58658c28877f1e119 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/275/912/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [275-912-15-1](https://asc.understandingaccounting.org/asc/275/912/#275-912-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:26.892Z to 2026-09-09T23:22:26.892Z Record version: sha256:e1fa174f999d4edd5a44486c40af746ed55ff3b6361611cf04553b0982fe56a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 912-10-15. Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:3aac94d5ff773236ca914a658d4537d8e815d4bc245712777fee358b1fc64208 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/275/912/#50-disclosure) SEC content: no ##### [275-912-50-1](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:f9622f965c1a645ed39426e4c6fade8aa8c01e90a1ff824ad86ca1768f4c1c19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). #### Termination Claims ##### [275-912-50-2](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:8cf43bf1f7f4322d5523baa529f898577436772c203a3a4b594b4c5a2a3c5bdd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some circumstances it will be impossible to make a reasonable estimate of a termination claim in time for inclusion in the financial statements of the period in which the termination occurs. Effect may then be given in the statements to those parts of the termination claim that are determinable with reasonable certainty and disclosure made, by note or otherwise, of the status of the remainder. ##### [275-912-50-3](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:67515c15252dc707f1d049c6bf9ba90c5e2684b992f962f5ff55c3236994e712 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the contractor's claim includes items of known controversial nature it shall be stated at the amount estimated to be collectible. If a particular termination claim or part thereof is so uncertain in amount that it cannot be reasonably estimated, it is preferable not to give effect to that part of the claim in the financial statements. If the total of such undeterminable elements is material, the circumstances shall be disclosed in statements issued or available to be issued (as discussed in Section 855-10-25) before the removal of the uncertainty. In an extreme circumstance involving undeterminable claims, consideration shall be given to delaying the issuance of financial statements until necessary data are available. ##### [275-912-50-4](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:6791a3ef1c1d7bb3eb13cdd87c57e1725b994df6602c24ae581d90da7e48cd9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The effect of a contract termination shall be reflected in the financial statements of the contractor in the period in which the termination occurs, or earlier if the termination is a subsequent event occurring before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) and attributable to conditions that existed at the date of the balance sheet. If sufficient information is not available to predict the effect of a very recent termination, then the best information available shall be disclosed in the notes to financial statements in conformity with Topic 450. The effective date of termination shall be the date at which the contractor acquires the right to receive payment on the terminated portion of the contract. ##### [275-912-50-5](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:ed4f5636dd20872f03da8a3fad000af18a9249650e6e2be4fd1e2e6f4b3603fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Significant items of a known controversial nature also shall be disclosed in the notes to financial statements, although estimates of ultimate amounts to be realized may not be determinable. ##### [275-912-50-6](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:544ceb592a8919a7acadabe4d1a76b4332670d095a29bd46cfd3cdadd3f068fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The government contractor is subject to a degree of risk different from its commercial counterpart because of the unilateral contract right of the government to terminate a contract. If there are indications that a contract termination may occur and the termination would have a material effect on the contractor's operations, disclosure of the circumstances and the potential effects shall be made in the notes to financial statements. Indicators of a potential contract termination include notice of a possible termination, contract performance problems, procurement cutbacks, and so forth. ##### [275-912-50-7](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:2da2fabb2b233671f49996f659bf554ad7b51267d59f96610925699580011712 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [420-10-50-1](https://asc.understandingaccounting.org/asc/420/10/#420-10-50-1) provides guidance on information about contract terminations to be disclosed in notes to financial statements.