An entity shall disclose certain loss contingencies even though the possibility of loss may be remote. The common characteristic of those contingencies is a guarantee that provides a right to proceed against an outside party in the event that the guarantor is called on to satisfy the guarantee. Examples include the following: - a
- b
Obligations of commercial banks under standby letters of credit
- c
Guarantees to repurchase receivables (or, in some cases, to repurchase the related property) that have been sold or otherwise assigned
- d
Other agreements that in substance have the same guarantee characteristic.
(P) December 16, 2027; (N) December 16, 2028
270-10-65-1For interim and annual reporting periods, an entity shall disclose certain loss contingencies even though the possibility of loss may be remote. The common characteristic of those contingencies is a guarantee that provides a right to proceed against an outside party in the event that the guarantor is called on to satisfy the guarantee. Examples include the following: - a
- b
Obligations of commercial banks under standby letters of credit
- c
Guarantees to repurchase receivables (or, in some cases, to repurchase the related property) that have been sold or otherwise assigned
- d
Other agreements that in substance have the same guarantee characteristic.
The disclosure shall include the nature and amount of the guarantee. Consideration should be given to disclosing, if estimable, the value of any recovery that could be expected to result, such as from the guarantor's right to proceed against an outside party.
(P) December 16, 2027; (N) December 16, 2028
270-10-65-1For interim and annual reporting periods, the disclosure shall include the nature and amount of the guarantee. Consideration should be given to disclosing, if estimable, the value of any recovery that could be expected to result, such as from the guarantor's right to proceed against an outside party. A guarantor shall disclose all of the following information about each guarantee, or each group of similar guarantees, even if the likelihood of the guarantor's having to make any payments under the guarantee is remote: - a
The nature of the guarantee, including all of the following:
- 1
The approximate term of the guarantee
- 2
How the guarantee arose
- 3
The events or circumstances that would require the guarantor to perform under the guarantee
- 4
The current status (that is, as of the date of the statement of financial position) of the payment/performance risk of the guarantee (for example, the current status of the payment/performance risk of a credit-risk-related guarantee could be based on either recently issued external credit ratings or current internal groupings used by the guarantor to manage its risk)
- 5
If the entity uses internal groupings for purposes of item (a)(4), how those groupings are determined and used for managing risk.
- b
All of the following information about the maximum potential amount of future payments under the guarantee:
- 1
The maximum potential amount of future payments (undiscounted) that the guarantor could be required to make under the guarantee, which shall not be reduced by the effect of any amounts that may possibly be recovered under recourse or collateralization provisions in the guarantee (which are addressed under (d) and (e))
- 2
If the terms of the guarantee provide for no limitation to the maximum potential future payments under the guarantee, that fact
- 3
If the guarantor is unable to develop an estimate of the maximum potential amount of future payments under its guarantee, the reasons why it cannot estimate the maximum potential amount.
- c
The current carrying amount of the liability, if any, for the guarantor's obligations under the guarantee (including the amount, if any, recognized under Section 450-20-30 or Subtopic 326-20 on financial instruments measured at amortized cost), regardless of whether the guarantee is freestanding or embedded in another contract - d
The nature of any recourse provisions that would enable the guarantor to recover from third parties any of the amounts paid under the guarantee
- e
The nature of any assets held either as collateral or by third parties that, upon the occurrence of any triggering event or condition under the guarantee, the guarantor can obtain and liquidate to recover all or a portion of the amounts paid under the guarantee
- f
If estimable, the approximate extent to which the proceeds from liquidation of assets held either as collateral or by third parties would be expected to cover the maximum potential amount of future payments under the guarantee.
See the Product Warranties Subsection of Section 460-10-50 for an exception to the requirements of (b). (P) December 16, 2027; (N) December 16, 2028
270-10-65-1For interim and annual reporting periods, a guarantor shall disclose all of the following information about each guarantee, or each group of similar guarantees, even if the likelihood of the guarantor's having to make any payments under the guarantee is remote: - a
The nature of the guarantee, including all of the following:
- 1
The approximate term of the guarantee
- 2
How the guarantee arose
- 3
The events or circumstances that would require the guarantor to perform under the guarantee
- 4
The current status (that is, as of the date of the statement of financial position) of the payment/performance risk of the guarantee (for example, the current status of the payment/performance risk of a credit-risk-related guarantee could be based on either recently issued external credit ratings or current internal groupings used by the guarantor to manage its risk)
- 5
If the entity uses internal groupings for purposes of item (a)(4), how those groupings are determined and used for managing risk.
- b
All of the following information about the maximum potential amount of future payments under the guarantee:
- 1
The maximum potential amount of future payments (undiscounted) that the guarantor could be required to make under the guarantee, which shall not be reduced by the effect of any amounts that may possibly be recovered under recourse or collateralization provisions in the guarantee (which are addressed under (d) and (e))
- 2
If the terms of the guarantee provide for no limitation to the maximum potential future payments under the guarantee, that fact
- 3
If the guarantor is unable to develop an estimate of the maximum potential amount of future payments under its guarantee, the reasons why it cannot estimate the maximum potential amount.
- c
The current carrying amount of the liability, if any, for the guarantor's obligations under the guarantee (including the amount, if any, recognized under Section 450-20-30 or Subtopic 326-20 on financial instruments measured at amortized cost), regardless of whether the guarantee is freestanding or embedded in another contract - d
The nature of any recourse provisions that would enable the guarantor to recover from third parties any of the amounts paid under the guarantee
- e
The nature of any assets held either as collateral or by third parties that, upon the occurrence of any triggering event or condition under the guarantee, the guarantor can obtain and liquidate to recover all or a portion of the amounts paid under the guarantee
- f
If estimable, the approximate extent to which the proceeds from liquidation of assets held either as collateral or by third parties would be expected to cover the maximum potential amount of future payments under the guarantee.
See the Product Warranties Subsection of Section 460-10-50 for an exception to the requirements of (b). A guarantor shall disclose all of the following information for product warranties and other guarantee contracts described in paragraph 460-10-15-9: - a
The information required to be disclosed by paragraph 460-10-50-4 except that a guarantor is not required to disclose the maximum potential amount of future payments specified in paragraph 460-10-50-4(b) - b
The guarantor's accounting policy and methodology used in determining its liability for product warranties
- c
A tabular reconciliation of the changes in the guarantor's aggregate product warranty liability for the reporting period. That reconciliation shall include all of the following amounts:
- 1
The beginning balance of the aggregate product warranty liability
- 2
The aggregate reductions in that liability for payments made (in cash or in kind) under the warranty
- 3
The aggregate changes in the liability for accruals related to product warranties issued during the reporting period
- 4
The aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates)
- 5
The ending balance of the aggregate product warranty liability.
(P) December 16, 2026; (N) December 16, 2026
220-40-65-1A guarantor shall disclose all of the following information for product warranties and other guarantee contracts described in paragraph 460-10-15-9: - a
The information required to be disclosed by paragraph 460-10-50-4 except that a guarantor is not required to disclose the maximum potential amount of future payments specified in paragraph 460-10-50-4(b) - b
The guarantor's accounting policy and methodology used in determining its liability for product warranties
- c
A tabular reconciliation of the changes in the guarantor's aggregate product warranty liability for the reporting period. That reconciliation shall include all of the following amounts:
- 1
The beginning balance of the aggregate product warranty liability
- 2
The aggregate reductions in that liability for payments made (in cash or in kind) under the warranty
- 3
The aggregate changes in the liability for accruals related to product warranties issued during the reporting period
- 4
The aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates)
- 5
The ending balance of the aggregate product warranty liability.
See paragraphs for additional disclosure requirements. (P) December 16, 2027; (N) December 16, 2028
270-10-65-1For interim and annual reporting periods, a guarantor shall disclose all of the following information for product warranties and other guarantee contracts described in paragraph 460-10-15-9: - a
The information required to be disclosed by paragraph 460-10-50-4 except that a guarantor is not required to disclose the maximum potential amount of future payments specified in paragraph 460-10-50-4(b) - b
The guarantor's accounting policy and methodology used in determining its liability for product warranties
- c
A tabular reconciliation of the changes in the guarantor's aggregate product warranty liability for the reporting period. That reconciliation shall include all of the following amounts:
- 1
The beginning balance of the aggregate product warranty liability
- 2
The aggregate reductions in that liability for payments made (in cash or in kind) under the warranty
- 3
The aggregate changes in the liability for accruals related to product warranties issued during the reporting period
- 4
The aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates)
- 5
The ending balance of the aggregate product warranty liability.
See paragraphs for additional disclosure requirements.