# ASC 405-924: Liabilities — Entertainment—Casinos Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/405/924/) 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): 2026-09-10T00:17:03.163Z to 2026-09-10T00:17:19.253Z Record version: sha256:2469fa574a4e223bbe7caffdcdda69ae56a8c36c6bd3600c61c0cd6b3c848cbb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-924: Liabilities — Entertainment—Casinos ### Machine-generated study aids ```json { "summary": "This Subtopic governs two casino-specific liabilities: outstanding gaming chips and jackpot obligations. A casino recognizes a chip liability equal to the difference between chips placed in service and chips in its own custody/control, adjusted periodically for chips that will never be redeemed. Jackpot liabilities are accrued only when the casino has an obligation to pay — base jackpots that can be avoided (e.g., by pulling the machine) are not accrued, while the customer-funded incremental portion of a progressive jackpot is accrued as play occurs.", "key_points": [ "Gaming chips are accounted for from the time the casino receives them, even if held in reserve rather than issued immediately (405-924-25-1).", "When a customer exchanges cash for chips, the casino has a liability until the chips are redeemed or won by the house; the liability equals chips placed in service less the chip inventory in the casino's custody or control (405-924-25-1).", "The chip liability shall be adjusted periodically to estimate chips that will never be redeemed, such as chips lost or kept as souvenirs (405-924-35-1).", "A liability for a jackpot is accrued at the time the entity has the obligation to pay it (or the applicable portion), regardless of the manner of payment (405-924-25-2).", "No liability is recognized for a base jackpot the entity can avoid paying (for example, by removing the machine from play), even if it has no intention of removing the machine and expects the jackpot to be won (405-924-55-1).", "Where regulators treat the incremental portion of a progressive jackpot as customer-funded and require payout, that incremental portion is accrued as a liability at the time of funding (play) by customers (405-924-55-2).", "Scope follows the Overall Casinos Subtopic, Section 924-10-15 (405-924-15-1)." ], "categories": [ "Recognition", "Subsequent measurement", "Industry-specific", "Contingencies and guarantees" ], "audience_level": "intermediate", "student_note": "The tested distinction is base vs. progressive jackpots: an avoidable base jackpot creates no liability no matter how likely a payout is, while the customer-funded incremental progressive amount accrues with play. Students often wrongly assume expected payment alone triggers accrual — the trigger is a present obligation the casino cannot avoid.", "related_topics": [ "924-10", "924-405", "405-20", "450-20", "606-10" ], "key_concepts": [ "gaming chip liability", "chips placed in service", "unredeemed chips", "base jackpot", "progressive jackpot", "obligation to pay", "customer-funded jackpot increment", "breakage estimate" ] } ``` Source downloaded (UTC): 2026-09-10T00:17:03.163Z to 2026-09-10T00:17:03.163Z Record version: sha256:d3d4abab19ad0fdc633383fa5e9ca6e427b78338bec79ffff5572619663d0ec5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-924-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/405/924/#00-status) SEC content: no ##### [405-924-00-1](https://asc.understandingaccounting.org/asc/405/924/#405-924-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:03.163Z to 2026-09-10T00:17:03.163Z Record version: sha256:fa2f137fa0355415046ef14c0bab4b85c67488388499ea6e13dbd67f759a5e4d 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
Base JackpotAddedAccounting Standards Update No. 2014-0905/28/2014
Slot MachineAddedAccounting Standards Update No. 2014-0905/28/2014
924-405-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
924-405-25-2AddedAccounting Standards Update No. 2014-0905/28/2014
924-405-55-1AddedAccounting Standards Update No. 2014-0905/28/2014
924-405-55-2AddedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T00:17:07.155Z to 2026-09-10T00:17:07.155Z Record version: sha256:4a71a193e27cea936ec7516ea6ec5f24c68f4b200ca28ecd44c0dfbf49665026 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-924-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/405/924/#05-overview-and-background) SEC content: no ##### [405-924-05-1](https://asc.understandingaccounting.org/asc/405/924/#405-924-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:07.155Z to 2026-09-10T00:17:07.155Z Record version: sha256:e95bb76881cebb89a90154a6e8f309c7af362d79ba6a62e8b39c2ce276de0158 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses the following: 1. a The accounting for gaming [chips](https://asc.understandingaccounting.org/glossary/c/#chips "Money substitutes, in various denominations, issued by a gaming entity and used for wagering.") held in inventory by casino entities and for gaming chips distributed to casino customers. 2. b The accounting for jackpot liabilities. Source downloaded (UTC): 2026-09-10T00:17:10.978Z to 2026-09-10T00:17:10.978Z Record version: sha256:e0b927bf3c44a2b971500066db3ac3b0b11efd72e7bb3b3b32399bfb35ab7b2e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-924-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/405/924/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [405-924-15-1](https://asc.understandingaccounting.org/asc/405/924/#405-924-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:10.978Z to 2026-09-10T00:17:10.978Z Record version: sha256:2bf161adf6df887c65f9c8a38ce567005da0d5d8b10c90f5688445d943367280 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 924-10-15. Source downloaded (UTC): 2026-09-10T00:17:15.787Z to 2026-09-10T00:17:15.787Z Record version: sha256:a4846cbdfc815939bb1852067bac1adf3fb3dd6ecd74a47632234afe31effdd9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-924-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/405/924/#25-recognition) SEC content: no #### Gaming Chips ##### [405-924-25-1](https://asc.understandingaccounting.org/asc/405/924/#405-924-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:15.787Z to 2026-09-10T00:17:15.787Z Record version: sha256:0d914ca3341b2fa12e68c5d6370c4af9f500aafa5a878e722ca85d844ef2525d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Gaming [chips](https://asc.understandingaccounting.org/glossary/c/#chips "Money substitutes, in various denominations, issued by a gaming entity and used for wagering.") are accounted for from the time the casino receives them even though the casino may not issue them immediately, but, instead, hold them in reserve. When a customer exchanges cash for gaming chips, the casino has a liability as long as those chips are not redeemed or won by the house. That liability is established by determining the difference between the total chips placed in service and the actual inventory of chips in custody or under the control of the casino. #### Jackpot Liabilities ##### [405-924-25-2](https://asc.understandingaccounting.org/asc/405/924/#405-924-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:15.787Z to 2026-09-10T00:17:15.787Z Record version: sha256:5bc96e822ac5a2cb3ea0637c3283d09ce6da5e03fe957fb2e2840caa89dd8baf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall accrue a liability at the time the entity has the obligation to pay the jackpot (or a portion thereof as applicable), regardless of the manner of payment. See paragraphs [924-405-55-1 through 55-2](https://asc.understandingaccounting.org/asc/405/924/#405-924-55-1) for implementation guidance. Source downloaded (UTC): 2026-09-10T00:17:17.599Z to 2026-09-10T00:17:17.599Z Record version: sha256:9d761d0f852b8961e07598c8a1f8bb1ae8f45c260f1c8076c45f8f463600a3e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-924-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/405/924/#35-subsequent-measurement) SEC content: no #### Unredeemable Gaming Chips ##### [405-924-35-1](https://asc.understandingaccounting.org/asc/405/924/#405-924-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:17.599Z to 2026-09-10T00:17:17.599Z Record version: sha256:a1d72e0b1afa223bbe1798ec33452d0c876051f87767d5eb456acea14018a56c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The chip liability shall be adjusted periodically to reflect an estimate of [chips](https://asc.understandingaccounting.org/glossary/c/#chips "Money substitutes, in various denominations, issued by a gaming entity and used for wagering.") that will never be redeemed (for example, chips that have been lost, taken as souvenirs, and so on). Source downloaded (UTC): 2026-09-10T00:17:19.253Z to 2026-09-10T00:17:19.253Z Record version: sha256:06de499b6c712b1cd07c9fc34bcde9662bac1175c4dc88358a672a433d62251e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-924-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/405/924/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [405-924-55-1](https://asc.understandingaccounting.org/asc/405/924/#405-924-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:19.253Z to 2026-09-10T00:17:19.253Z Record version: sha256:4324365b1585eb47208e1456ab8330689a07adbfe927cb2af42ca6589c4eca51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The implementation guidance in this paragraph and the following paragraph addresses the application of paragraph [924-405-25-2](https://asc.understandingaccounting.org/asc/405/924/#405-924-25-2). Some [slot machines](https://asc.understandingaccounting.org/glossary/s/#slot-machine "A type of mechanical or electrical apparatus used in connection with gaming.") or other games may contain [base jackpots](https://asc.understandingaccounting.org/glossary/b/#base-jackpot "The fixed, minimum amount of a slot machine payout for a specific combination."). Depending on the applicable gaming regulations, an entity may be able to avoid the payment of a base jackpot, for example, by removing the machine from play. In accordance with the guidance in paragraph [924-405-25-2](https://asc.understandingaccounting.org/asc/405/924/#405-924-25-2), no liability associated with the base jackpot is recognized in such cases until the entity has the obligation to pay the base jackpot. That is the case even if the entity has no intention of removing the machine from play and expects the base jackpot to ultimately be won. ##### [405-924-55-2](https://asc.understandingaccounting.org/asc/405/924/#405-924-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:19.253Z to 2026-09-10T00:17:19.253Z Record version: sha256:6f26a4982221d9d615fff483191667701f035ac47fe5a6c03a4d2bfcfbfd8e0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses the application of paragraph [924-405-25-2](https://asc.understandingaccounting.org/asc/405/924/#405-924-25-2). Some slot machines or other gaming machines include progressive jackpots. Entities in many gaming jurisdictions cannot avoid payment of the portion of the progressive jackpot that is incremental to the base jackpot because the gaming regulators consider the incremental portion of the jackpot to be funded by customers and required to be paid out (whether as a jackpot or through other means, such as a raffle). Paragraph [924-405-25-2](https://asc.understandingaccounting.org/asc/405/924/#405-924-25-2) requires that, in such cases, the incremental portion of the jackpot be accrued as a liability at the time of funding (play) by its customers.