{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/460/10/#15-scope-and-scope-exceptions","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"460","topic_title":"Guarantees","subtopic":"460-10","subtopic_title":"Overall","section":{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"460-10-15-1","para":"15-1","html":"
The General Subsection of this Section establishes the pervasive scope for the Guarantees Topic, with specific exceptions noted in the other Subsections of this Section.
","snippet":"The General Subsection of this Section establishes the pervasive scope for the Guarantees Topic, with specific exceptions noted in the other Subsections of this Section.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dfe12d592cd6382e625025f3465e31278b9e641e22937b155c90f592ce8c6f48","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4d3f2da03a06f7f0f1af9cd583471bea3449133184f986a9d01d2e927c985229","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},{"block":null,"heading":"Entities","paragraphs":[{"citation":"460-10-15-2","para":"15-2","html":"
The guidance in the Guarantees Topic applies to all entities.
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The transactions guidance for the scope of the Guarantees Topic is organized as follows:
  1. a
    Transactions that are within the scope of this Topic
  2. b
    Transactions that are excluded from the scope of this Topic.
","snippet":"The transactions guidance for the scope of the Guarantees Topic is organized as follows:\n(a) Transactions that are within the scope of this Topic\n(b) Transactions that are excluded from the scope of this Topic.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a63854c69bd34538136e5b377921421fa03d00172a720e9b109134d1c1f28ec6","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},{"citation":"460-10-15-4","para":"15-4","html":"
Except as provided in paragraph 460-10-15-7, the provisions of this Topic apply to the following types of guarantee contracts:
  1. a
    Contracts that contingently require a guarantor to make payments (as described in the following paragraph) to a guaranteed party based on changes in an underlying that is related to an asset, a liability, or an equity security of the guaranteed party. For related implementation guidance, see paragraph 460-10-55-2.
  2. b
    Contracts that contingently require a guarantor to make payments (as described in the following paragraph) to a guaranteed party based on another entity's failure to perform under an obligating agreement (performance guarantees). For related implementation guidance, see paragraph 460-10-55-12.
  3. c
    Indemnification agreements (contracts) that contingently require an indemnifying party (guarantor) to make payments to an indemnified party (guaranteed party) based on changes in an underlying that is related to an asset, a liability, or an equity security of the indemnified party.
  4. d
    Indirect guarantees of the indebtedness of others, even though the payment to the guaranteed party may not be based on changes in an underlying that is related to an asset, a liability, or an equity security of the guaranteed party.
","snippet":"Except as provided in paragraph 460-10-15-7, the provisions of this Topic apply to the following types of guarantee contracts:\n(a) Contracts that contingently require a guarantor to make payments (as described in the fol…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:03fe68e243454f8896e37b39d663960a019753c6ae611bf818a0a077e2174789","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},{"citation":"460-10-15-5","para":"15-5","html":"
Payments by a guarantor (referred to in the preceding paragraph) could be either in cash, financial instruments, other assets, shares of its stock, or provision of services. Further, a guarantor's payments could involve a gross settlement, in which certain assets are concurrently transferred to the guarantor in exchange for the specified consideration (as in the settlement of an exercised put option or other contingent forward contract), or a net settlement. Thus, both financial and nonfinancial contracts are included in the scope of paragraph 460-10-15-4.
","snippet":"Payments by a guarantor (referred to in the preceding paragraph) could be either in cash, financial instruments, other assets, shares of its stock, or provision of services. Further, a guarantor's payments could involve …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f7ec30c06ccd9c0c713f7bb86651314e53f4c1093c9ae29d9eed1d309e784f37","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},{"citation":"460-10-15-6","para":"15-6","html":"
For guarantees of debt, it does not matter whether the guaranteed party is the creditor or the debtor, that is, whether the guarantor is required to pay the creditor or the debtor (who would then have the funds to pay its debt to the creditor). The underlying (that is, the debtor's failure to make scheduled payments or the occurrence of other events of default) could be related to either the creditor's receivable or the debtor's liability.
","snippet":"For guarantees of debt, it does not matter whether the guaranteed party is the creditor or the debtor, that is, whether the guarantor is required to pay the creditor or the debtor (who would then have the funds to pay it…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4774392524304e0625438d7c5a0827d353717541e3cbce5ae790102893b61ef2","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},{"citation":"460-10-15-7","para":"15-7","html":"
The guidance in this Topic does not apply to the following types of guarantee contracts:
  1. a
    A guarantee or an indemnification that is excluded from the scope of Topic 450 (see paragraph 450-20-15-2—primarily employment-related guarantees)
  2. b
    A lessee's guarantee of the residual value of the underlying asset at the expiration of the lease term under Topic 842
  3. c
    A contract that meets the characteristics in paragraph 460-10-15-4(a) but is accounted for as variable lease payments under Topic 842
  4. d
    A guarantee (or an indemnification) that is issued by either an insurance entity or a reinsurance entity and accounted for under Topic 944 (including guarantees embedded in either insurance contracts or investment contracts)
  5. e
    A contract that meets the characteristics in paragraph 460-10-15-4(a) but provides for payments that constitute a vendor rebate (by the guarantor) based on either the sales revenues of, or the number of units sold by, the guaranteed party
  6. f
    A contract that provides for payments that constitute a vendor rebate (by the guarantor) based on the volume of purchases by the buyer (because the underlying relates to an asset of the seller, not the buyer who receives the rebates)
  7. g
    A guarantee or an indemnification whose existence prevents the guarantor from being able to either account for a transaction as the sale of an asset that is related to the guarantee's underlying or recognize in earnings the profit from that sale transaction
  8. h
    A registration payment arrangement within the scope of Subtopic 825-20 (see Section 825-20-15)
  9. i
    A guarantee or an indemnification of an entity's own future performance (for example, a guarantee that the guarantor will not take a certain future action)
  10. j
    A guarantee that is accounted for as a credit derivative at fair value under Topic 815.
  11. k
    A sales incentive program in which a manufacturer contractually guarantees to reacquire the equipment at a guaranteed price or guaranteed prices at a specified time, or at specified time periods (for example, the entity is obligated to reacquire the equipment or the entity is obligated at the customer's request to reacquire the equipment). That program shall be evaluated in accordance with Topic 606 on revenue from contracts with customers, specifically the implementation guidance on repurchase agreements in paragraphs
    606-10-55-66 through 55-78
    .
For related implementation guidance, see Section 460-10-55.
","snippet":"The guidance in this Topic does not apply to the following types of guarantee contracts:\n(a) A guarantee or an indemnification that is excluded from the scope of Topic 450 (see paragraph 450-20-15-2—primarily employment-…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c102296816d3288a06479807c96ba46cd4c0cc33ce2d90163177e3899ac5215e","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b1e37c82107350dfafa81dbad18a056fbe40f431dc75b6a6b0ee66dcd4329940","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},{"block":"Product Warranties","heading":"Overall Guidance","paragraphs":[{"citation":"460-10-15-8","para":"15-8","html":"
The Product Warranties Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Section, see paragraph 460-10-15-1, with specific transaction exceptions noted below.
","snippet":"The Product Warranties Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Section, see paragraph 460-10-15-1, with specific transaction exceptions noted below.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fd656f6b03cfcf1fd089f040b7f12b93efdd735ac9503b940fcb023737ce1ed9","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2b8a6abf523b4057e0410f16444eb5aa89fc404573f0b6ec61605c26651f6bce","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},{"block":"Product Warranties","heading":"Transactions","paragraphs":[{"citation":"460-10-15-9","para":"15-9","html":"
The guidance in the Product Warranties Subsections applies only to product warranties, which include all of the following:
  1. a
    Product warranties issued by the guarantor, regardless of whether the guarantor is required to make payment in services or cash
  2. b
    Separately priced extended warranty or product maintenance contracts and warranties that provide a customer with a service in addition to the assurance that the product complies with agreed-upon specifications (see paragraphs
    606-10-55-30 through 55-35
    for guidance on determining whether a warranty provides a customer with a service in addition to the assurance that the product complies with agreed-upon specifications)
  3. c
    Warranty obligations that are incurred in connection with the sale of the product, that is, obligations in which the customer does not have the option to purchase the warranty separately and that do not provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications.
","snippet":"The guidance in the Product Warranties Subsections applies only to product warranties, which include all of the following:\n(a) Product warranties issued by the guarantor, regardless of whether the guarantor is required t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6109842766dae351afe1587e8d97792c5cc02d2eb95f68844ca37a91312adea4","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5dae64ae748fc9c96a1f02584bd0891b60406088a73deb3844f79c22ec1d73c2","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},{"block":"Product Warranties","heading":"Other Considerations","paragraphs":[{"citation":"460-10-15-10","para":"15-10","html":"
The guidance in the General Subsections of Sections 460-10-25 and 460-10-30 does not apply to guarantee contracts within the scope of the Product Warranties Subsections. Those guarantee contracts are subject, however, to the requirements in the General Subsection of Section 460-10-50.
","snippet":"The guidance in the General Subsections of Sections 460-10-25 and 460-10-30 does not apply to guarantee contracts within the scope of the Product Warranties Subsections. Those guarantee contracts are subject, however, to…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c2d987cb4a6ed284237e56dc06044af80319f3a302f5b3e0e8bafc21abb0f3ff","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:986cced620bfdba47c0d6d4a79dd2b385b3d6e2a9a195d542d096765706edefa","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aaaa6641d7f2e5ab291150575a7c3850b97abae6b698b1347dd88b5a903c967a","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aaaa6641d7f2e5ab291150575a7c3850b97abae6b698b1347dd88b5a903c967a","downloaded_from":"2026-09-10T00:29:33.929Z","last_downloaded_at":"2026-09-10T00:29:33.929Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482109","source_sha256":"317691d96f0dbf5aba2f085c7a26aa694ddd0e145b02ba5d9932c56cedb99b44"}}