# ASC Topic 460: Guarantees Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/460/) 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): 2026-09-10T00:29:25.783Z to 2026-09-10T00:30:11.673Z Record version: sha256:0c2bb6f36a4ae0ac6baa7c0a717f4361ccfe9b9fbc40170d5e2d31effb5abad6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 460 tells a guarantor how to account for guarantees, and its core insight is that a guarantee contains two obligations: a noncontingent "stand-ready" obligation to perform over the term of the guarantee and a contingent obligation to make payments if triggering events occur. Under 460-10, the guarantor recognizes a liability at inception for the stand-ready obligation measured at fair value (the premium received in a standalone arm's-length transaction is a practical expedient), even when payment is not probable, with the liability being the greater of that fair value and any loss accrual required by Section 450-20-30; the liability is later reduced as the guarantor is released from risk. Even guarantees exempt from recognition (product warranties, derivatives at fair value, contingent consideration, equity-classified obligations, intercompany guarantees) must still be disclosed — nature and term, triggering events, maximum potential undiscounted future payments, carrying amount, recourse and collateral — even if the likelihood of payment is remote (460-10-50-4), and product warranties require a tabular rollforward of the aggregate warranty liability (460-10-50-8). ASC 460-954 simply applies this model to health care entities, pointing to the minimum revenue guarantee illustration for a recruited physician in 460-10-55-11. Source downloaded (UTC): 2026-09-10T00:29:25.783Z to 2026-09-10T00:30:02.138Z Record version: sha256:e1a5644828ad6f5da858e9e90313f4d1d1fff1615448a4b14eb192ba57030761 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10: Guarantees — Overall ### Machine-generated study aids ```json { "summary": "ASC 460-10 requires a guarantor to recognize a liability at the inception of a guarantee for the noncontingent \"stand-ready\" obligation it undertakes, generally measured at the fair value of the guarantee (with the premium received as a practical expedient), even if payment under the guarantee is not probable. It also imposes extensive disclosures about each guarantee (nature, term, triggering events, maximum potential undiscounted future payments, carrying amount, recourse and collateral) even when the likelihood of payment is remote. Separate Product Warranties Subsections apply ASC 450-20 loss-accrual conditions to warranty obligations and require a tabular rollforward of the aggregate product warranty liability.", "key_points": [ "The scope covers four contract types: contracts contingently requiring payment based on an underlying related to an asset, liability, or equity security of the guaranteed party; performance guarantees; indemnification agreements; and indirect guarantees of the indebtedness of others (460-10-15-4), with exclusions including lessee residual value guarantees, insurance contracts, vendor rebates, guarantees of the guarantor's own future performance, and credit derivatives at fair value under Topic 815 (460-10-15-7).", "A guarantee creates two obligations — a noncontingent stand-ready obligation and a contingent obligation to pay if triggering events occur — and no bifurcation is required unless the guarantee is within the scope of Subtopic 326-20, in which case expected credit losses are measured separately from the guarantee's fair value (460-10-25-2; 460-10-30-5).", "At inception the guarantor shall recognize a liability for the guarantee (460-10-25-4), and Section 450-20-25 does not prohibit that recognition merely because payment is not probable (460-10-25-3).", "Initial measurement objective is fair value — the premium received in a standalone arm's-length transaction is a practical expedient, and in a multiple-element transaction fair value must be estimated — but the liability is the greater of that fair value amount and any contingent loss required to be accrued under Section 450-20-30 (460-10-30-2 through 30-4).", "Certain guarantees are exempt from recognition and initial measurement but not from disclosure: derivatives at fair value, product warranties and guarantees whose underlying relates to the function of nonfinancial assets, contingent consideration in a business combination, equity-classified obligations, and intercompany/parent-subsidiary guarantees (460-10-25-1; 460-10-15-10).", "The initial liability is typically reduced by a credit to earnings as the guarantor is released from risk (upon expiration or settlement, by systematic and rational amortization, or as fair value changes), but fair value may not be used subsequently unless justified under GAAP; the contingent aspect follows Subtopic 450-20 (or 326-20 or 815) (460-10-35-1 through 35-4).", "Disclosure is required for each guarantee or group of similar guarantees even if payment is remote — nature and term, triggering events, payment/performance risk status, maximum potential undiscounted future payments, carrying amount, recourse and collateral (460-10-50-4) — while product warranties are exempt from the maximum-payment disclosure but require a policy disclosure and a tabular reconciliation of the aggregate warranty liability, which is accrued under the 450-20-25-2 conditions (460-10-25-5; 460-10-50-8)." ], "categories": [ "Contingencies and guarantees", "Recognition", "Initial measurement", "Disclosure" ], "audience_level": "intermediate", "student_note": "The classic exam trap is thinking a guarantee liability arises only when loss is probable under ASC 450-20; ASC 460 instead requires day-one recognition of the stand-ready obligation at fair value even when payment is remote, and the disclosure requirements (including maximum potential undiscounted payments) reach many guarantees that are exempt from recognition, such as product warranties and intercompany guarantees.", "related_topics": [ "450-20", "326-20", "815", "606", "842", "805-30" ], "key_concepts": [ "stand-ready obligation", "noncontingent versus contingent aspect", "guarantee liability at inception", "fair value practical expedient", "maximum potential amount of future payments", "product warranty liability rollforward", "indemnification agreement", "indirect guarantee of indebtedness of others" ] } ``` Source downloaded (UTC): 2026-09-10T00:29:25.783Z to 2026-09-10T00:29:25.783Z Record version: sha256:3f1cab286647a734d19004f5ca73f4415d993659972de0965e3fa626d636bfdc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/460/10/#00-status) SEC content: no ##### [460-10-00-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:25.783Z to 2026-09-10T00:29:25.783Z Record version: sha256:0ff603ae2aac5104df4121d380395d7462e016961edb3e2e0c4fc5b8aa2cca75 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
AcquirerAmendedAccounting Standards Update No. 2025-0305/12/2025
Acquisition by a Not-for-Profit EntityAddedAccounting Standards Update No. 2010-0701/28/2010
Bargain Purchase OptionSupersededAccounting Standards Update No. 2016-0202/25/2016
Bargain Renewal OptionSupersededAccounting Standards Update No. 2016-0202/25/2016
BusinessAmendedAccounting Standards Update No. 2017-0101/05/2017
Commencement Date of the Lease (Commencement Date)AddedAccounting Standards Update No. 2016-0202/25/2016
CustomerAddedAccounting Standards Update No. 2014-0905/28/2014
ContractAddedAccounting Standards Update No. 2014-0905/28/2014
Direct Guarantee of IndebtednessAddedAccounting Standards Update No. 2014-0603/14/2014
Fair Value (3rd def.)AddedAccounting Standards Update No. 2012-0410/01/2012
Indirect Guarantee of IndebtednessAmendedAccounting Standards Update No. 2014-0603/14/2014
Indirectly Related to the Leased PropertySupersededAccounting Standards Update No. 2016-0202/25/2016
LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Lease PaymentsAddedAccounting Standards Update No. 2016-0202/25/2016
Lease TermAmendedAccounting Standards Update No. 2016-0202/25/2016
LesseeAddedAccounting Standards Update No. 2016-0202/25/2016
LessorAddedAccounting Standards Update No. 2016-0202/25/2016
Noncancelable Lease TermSupersededAccounting Standards Update No. 2016-0202/25/2016
Performance ObligationAddedAccounting Standards Update No. 2014-0905/28/2014
Registration Payment ArrangementAddedAccounting Standards Update No. 2016-1912/14/2016
ReinsuranceAddedAccounting Standards Update No. 2016-1912/14/2016
RevenueAddedAccounting Standards Update No. 2014-0905/28/2014
Underlying AssetAddedAccounting Standards Update No. 2016-0202/25/2016
Variable Interest EntitySupersededAccounting Standards Update No. 2025-0305/12/2025
Variable Lease PaymentsAddedAccounting Standards Update No. 2016-0202/25/2016
460-10-05-3AmendedAccounting Standards Update No. 2015-1006/12/2015
460-10-15-7AmendedAccounting Standards Update No. 2016-1912/14/2016
460-10-15-7AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-15-7AmendedAccounting Standards Update No. 2014-0905/28/2014
460-10-15-9AmendedAccounting Standards Update No. 2014-0905/28/2014
460-10-25-1AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-25-1AmendedAccounting Standards Update No. 2010-0701/28/2010
460-10-25-2AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-25-3AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-25-8AmendedAccounting Standards Update No. 2014-0905/28/2014
460-10-25-8AAddedAccounting Standards Update No. 2014-0905/28/2014
460-10-30-2AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-30-2AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-30-3AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-30-5AddedAccounting Standards Update No. 2016-1306/16/2016
460-10-35-2AmendedMaintenance Update 2014-20 (PDF)09/29/2014
460-10-35-3SupersededAccounting Standards Update No. 2016-1306/16/2016
460-10-35-4AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-35-4AmendedMaintenance Update 2014-20 (PDF)09/29/2014
460-10-45-1AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-50-1AmendedAccounting Standards Update No. 2020-1010/29/2020
460-10-50-1AmendedAccounting Standards Update No. 2016-1912/14/2016
460-10-50-2 through 50-4
AmendedAccounting Standards Update No. 2025-1112/08/2025
460-10-50-4AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-50-5AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-50-8AmendedAccounting Standards Update No. 2025-1112/08/2025
460-10-50-8AmendedAccounting Standards Update No. 2024-0311/04/2024
460-10-50-8AmendedAccounting Standards Update No. 2014-0905/28/2014
460-10-55-15AmendedAccounting Standards Update No. 2012-0410/01/2012
460-10-55-16AmendedMaintenance Update 2015-11 (PDF)06/19/2015
460-10-55-16AmendedAccounting Standards Update No. 2012-0410/01/2012
460-10-55-16AmendedAccounting Standards Update No. 2009-1612/23/2009
460-10-55-17AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-55-17AmendedAccounting Standards Update No. 2014-0905/28/2014
460-10-55-18AmendedAccounting Standards Update No. 2012-0410/01/2012
460-10-55-22AmendedAccounting Standards Update No. 2016-1306/16/2016
460-10-55-23AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-60-3AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-60-3AmendedAccounting Standards Update No. 2014-0905/28/2014
460-10-60-8 through 60-10
SupersededAccounting Standards Update No. 2014-0905/28/2014
460-10-60-16 through 60-18
AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-60-19SupersededAccounting Standards Update No. 2016-0202/25/2016
460-10-60-20 through 60-24
AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-60-25 through 60-27
SupersededAccounting Standards Update No. 2016-0202/25/2016
460-10-60-28SupersededAccounting Standards Update No. 2012-0410/01/2012
460-10-60-29 through 60-31
SupersededAccounting Standards Update No. 2016-0202/25/2016
460-10-60-32AmendedAccounting Standards Update No. 2018-1007/18/2018
460-10-60-32AmendedAccounting Standards Update No. 2016-0202/25/2016
460-10-60-33SupersededAccounting Standards Update No. 2016-0202/25/2016
460-10-60-34SupersededAccounting Standards Update No. 2012-0410/01/2012
460-10-60-35SupersededAccounting Standards Update No. 2015-1006/12/2015
460-10-60-36AmendedAccounting Standards Update No. 2009-1612/23/2009
460-10-60-38SupersededAccounting Standards Update No. 2014-0905/28/2014
460-10-60-41AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T00:29:27.790Z to 2026-09-10T00:29:27.790Z Record version: sha256:58e19f1213b7752ec98fe5aa6d66879cf887d3a80333b4eaa83f7cdf0de4920b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/460/10/#05-overview-and-background) SEC content: no ##### [460-10-05-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:27.790Z to 2026-09-10T00:29:27.790Z Record version: sha256:5e3dcd65ee83aa1085a1ea9105e4ebdaf7b8c39b5a2964fa9c549a371d47980c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Guarantees Topic establishes the accounting and disclosure requirements to be met by a guarantor for certain guarantees issued and outstanding. This Topic contains only the Overall Subtopic. The guidance in this Subtopic is presented in the following two Subsections: 1. a General 2. b Product [Warranties](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place."). ##### [460-10-05-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:27.790Z to 2026-09-10T00:29:27.790Z Record version: sha256:4878e97cf9fe30b7646c44a2b99b80a0357a9facc12317e8ccfe39d02e650c8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections address the recognition of a liability by a guarantor at the inception of a guarantee for the obligations the guarantor has undertaken in issuing that guarantee, and require certain disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees. ##### [460-10-05-3](https://asc.understandingaccounting.org/asc/460/10/#460-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:27.790Z to 2026-09-10T00:29:27.790Z Record version: sha256:87479fb689f7ef4aa18722db3f31784e7c0cf96e6e97cddfa2e292550173531a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Additional guidance about certain guarantees, such as put options, is provided in other Topics. Section 460-10-60 provides links to those other Topics. Guarantees that are unique to a particular industry are discussed in the Topic for that industry. ### Product Warranties ##### [460-10-05-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:27.790Z to 2026-09-10T00:29:27.790Z Record version: sha256:f68570e519f2490c209f4fa466f8ea1e6ffe86503fc1a5e7dd2fa8c0f098824e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Product Warranties Subsections address accounting for product [warranties](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place."). Source downloaded (UTC): 2026-09-10T00:29:31.408Z to 2026-09-10T00:29:31.408Z Record version: sha256:c71a79b7a68abc5868923070a33ce1ef992107fc8573d036fb4982298b81131e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/460/10/#10-objectives) SEC content: no ##### [460-10-10-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:31.408Z to 2026-09-10T00:29:31.408Z Record version: sha256:ff76291e9fe0d8319f1d10b97625a2d12156d5058ac6282b399d5f2a20a87057 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of the Guarantees Topic is to achieve transparency in a guarantor's financial reporting about the obligations and risks arising from issuing guarantees in the following two ways: 1. a To provide informative disclosures about the nature and amount of guarantees in the financial statements of guarantors 2. b To help ensure comparability of financial reporting for guarantees issued with a separately identified premium and guarantees issued without a separately identified premium by requiring recognition of a liability for the obligation incurred by a guarantor in issuing a guarantee. Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:aaaa6641d7f2e5ab291150575a7c3850b97abae6b698b1347dd88b5a903c967a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/460/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [460-10-15-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:dfe12d592cd6382e625025f3465e31278b9e641e22937b155c90f592ce8c6f48 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Entities ##### [460-10-15-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:466855d0feffe9f35038e31bb057994ebd29008ab553952c305b342e919d0dfb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Guarantees Topic applies to all entities. #### Transactions ##### [460-10-15-3](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:a63854c69bd34538136e5b377921421fa03d00172a720e9b109134d1c1f28ec6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [460-10-15-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:03fe68e243454f8896e37b39d663960a019753c6ae611bf818a0a077e2174789 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except as provided in paragraph [460-10-15-7](https://asc.understandingaccounting.org/asc/460/10/#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](https://asc.understandingaccounting.org/glossary/u/#underlying "A specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, or other variable (including the occurrence or nonoccurrence of a specified event such as a scheduled payment under a contract). An underlying may be a price or rate of an asset or liability but is not the asset or liability itself. An underlying is a variable that, along with either a notional amount or a payment provision, determines the settlement of a derivative instrument.") 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](https://asc.understandingaccounting.org/asc/460/10/#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](https://asc.understandingaccounting.org/asc/460/10/#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](https://asc.understandingaccounting.org/glossary/i/#indirect-guarantee-of-indebtedness "An agreement that obligates the guarantor to transfer funds to a debtor upon the occurrence of specified events, under conditions whereby: After funds are transferred from the guarantor to the debtor, the funds become legally available to creditors through their claims against the debtor Those creditors may enforce the debtor's claims against the guarantor under the agreement. In contrast, with a direct guarantee of indebtedness, if the debtor defaults, the creditor has a direct claim on the guarantor. Examples of indirect guarantees include agreements to advance funds if a debtor's net income, coverage of fixed charges, or working capital falls below a specified minimum.") 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. ##### [460-10-15-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:f7ec30c06ccd9c0c713f7bb86651314e53f4c1093c9ae29d9eed1d309e784f37 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4). ##### [460-10-15-6](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:4774392524304e0625438d7c5a0827d353717541e3cbce5ae790102893b61ef2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [460-10-15-7](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:c102296816d3288a06479807c96ba46cd4c0cc33ce2d90163177e3899ac5215e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/450/20/#450-20-15-2)—primarily employment-related guarantees) 2. b A lessee's guarantee of the residual value of the [underlying asset](https://asc.understandingaccounting.org/glossary/u/#underlying-asset "An asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset.") at the expiration of the [lease term](https://asc.understandingaccounting.org/glossary/l/#lease-term "The noncancellable period for which a lessee has the right to use an underlying asset, together with all of the following: Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option Periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option Periods covered by an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the lessor.") under Topic 842 3. c A contract that meets the characteristics in paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) but is accounted for as [variable lease payments](https://asc.understandingaccounting.org/glossary/v/#variable-lease-payments "Payments made by a lessee to a lessor for the right to use an underlying asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time.") under Topic 842 4. d A guarantee (or an indemnification) that is issued by either an insurance entity or a [reinsurance](https://asc.understandingaccounting.org/glossary/r/#reinsurance "A transaction in which a reinsurer (assuming entity), for a consideration (premium), assumes all or part of a risk undertaken originally by another insurer (ceding entity). For indemnity reinsurance, the legal rights of the insured are not affected by the reinsurance transaction and the insurance entity issuing the insurance contract remains liable to the insured for payment of policy benefits. Assumption or novation reinsurance contracts that are legal replacements of one insurer by another extinguish the ceding entity's liability to the policyholder.") 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)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) 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](https://asc.understandingaccounting.org/glossary/r/#registration-payment-arrangement "An arrangement with both of the following characteristics: It specifies that the issuer will endeavor to do either of the following: File a registration statement for the resale of specified financial instruments and/or for the resale of equity shares that are issuable upon exercise or conversion of specified financial instruments and for that registration statement to be declared effective by the U.S. Securities and Exchange Commission (SEC) (or other applicable securities regulator if the registration statement will be filed in a foreign jurisdiction) within a specified grace period Maintain the effectiveness of the registration statement for a specified period of time (or in perpetuity). It requires the issuer to transfer consideration to the counterparty if the registration statement for the resale of the financial instrument or instruments subject to the arrangement is not declared effective or if effectiveness of the registration statement is not maintained. That consideration may be payable in a lump sum or it may be payable periodically, and the form of the consideration may vary. For example, the consideration may be in the form of cash, equity instruments, or adjustments to the terms of the financial instrument or instruments that are subject to the registration payment arrangement (such as an increased interest rate on a debt instrument).") 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](https://asc.understandingaccounting.org/glossary/c/#credit-derivative "A derivative instrument that has both of the following characteristics: One or more of its underlyings are related to any of the following: The credit risk of a specified entity (or a group of entities) An index based on the credit risk of a group of entities. It exposes the seller to potential loss from credit-risk-related events specified in the contract. Examples of credit derivatives include, but are not limited to, credit default swaps, credit spread options, and credit index products.") 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](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.") request to reacquire the equipment). That program shall be evaluated in accordance with Topic 606 on [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, specifically the implementation guidance on repurchase agreements in paragraphs [606-10-55-66 through 55-78](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-66) . For related implementation guidance, see Section 460-10-55. ### Product Warranties #### Overall Guidance ##### [460-10-15-8](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:fd656f6b03cfcf1fd089f040b7f12b93efdd735ac9503b940fcb023737ce1ed9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-1), with specific transaction exceptions noted below. #### Transactions ##### [460-10-15-9](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:6109842766dae351afe1587e8d97792c5cc02d2eb95f68844ca37a91312adea4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Product Warranties Subsections applies only to product [warranties](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place."), 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](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") and warranties that provide 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.") 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](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-30) 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. #### Other Considerations ##### [460-10-15-10](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:33.929Z to 2026-09-10T00:29:33.929Z Record version: sha256:c2d987cb4a6ed284237e56dc06044af80319f3a302f5b3e0e8bafc21abb0f3ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/460/10/#50-disclosure) of Section 460-10-50. Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:09ccfd4ecee7ee207f5f5ea9397f7f2399bd5b4eb1cc883a3d8b140fc89a5444 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/460/10/#25-recognition) SEC content: no ##### [460-10-25-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:86ba25c30a2d1b304785609e54af15577d433bc0304b62636443ecb0792225b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following types of guarantees are not subject to the recognition provisions of this Subsection: 1. a A guarantee that is accounted for as a derivative instrument at fair value under Topic 815. 2. b A product [warranty](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place.")or other guarantee for which the [underlying](https://asc.understandingaccounting.org/glossary/u/#underlying "A specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, or other variable (including the occurrence or nonoccurrence of a specified event such as a scheduled payment under a contract). An underlying may be a price or rate of an asset or liability but is not the asset or liability itself. An underlying is a variable that, along with either a notional amount or a payment provision, determines the settlement of a derivative instrument.") is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party (see paragraph [460-10-15-9](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-9) for related guidance). 3. c A guarantee issued in a business combination or an [acquisition by a not-for-profit entity](https://asc.understandingaccounting.org/glossary/a/#acquisition-by-a-not-for-profit-entity "A transaction or other event in which a not-for-profit acquirer obtains control of one or more nonprofit activities or businesses and initially recognizes their assets and liabilities in the acquirer's financial statements. When applicable guidance in Topic 805 is applied by a not-for-profit entity, the term business combination has the same meaning as this term has for a for-profit entity. Likewise, a reference to business combinations in guidance that links to Topic 805 has the same meaning as a reference to acquisitions by not-for-profit entities.") that represents contingent consideration (as addressed in Subtopics 805-30 and 958-805). 4. d A guarantee for which the guarantor's obligation would be reported as an equity item rather than a liability under generally accepted accounting principles (GAAP) (see Topics 480 and 505). 5. e A guarantee by an original [lessee](https://asc.understandingaccounting.org/glossary/l/#lessee "An entity that enters into a contract to obtain the right to use an underlying asset for a period of time in exchange for consideration.") that has become secondarily liable under a new [lease](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") that relieved the original lessee from being the primary obligor (that is, principal debtor) under the original lease, as discussed in paragraph [842-20-40-3](https://asc.understandingaccounting.org/asc/842/20/#842-20-40-3). This exception shall not be applied by analogy to other secondary obligations. 6. f A guarantee issued either between parents and their subsidiaries or between corporations under common control. 7. g A parent's guarantee of its subsidiary's debt to a third party (whether the parent is a corporation or an individual). 8. h A subsidiary's guarantee of the debt owed to a third party by either its parent or another subsidiary of that parent. ##### [460-10-25-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:39e79f2b3d4ce9476b72afbf036a22d5ed3e93a7529c7004bba8e8b89011232f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The issuance of a guarantee obligates the guarantor (the issuer) in two respects: 1. a The guarantor undertakes an obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur (the noncontingent aspect). 2. b The guarantor undertakes a contingent obligation to make future payments if those triggering events or conditions occur (the contingent aspect). For guarantees that are not within the scope of Subtopic 326-20 on financial instruments measured at amortized cost, no bifurcation and no separate accounting for the contingent and noncontingent aspects of the guarantee are required by this Topic. For guarantees that are within the scope of Subtopic 326-20, the expected credit losses (the contingent aspect) shall be measured and accounted for in addition to and separately from the fair value of the guarantee (the noncontingent aspect) in accordance with paragraph [460-10-30-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-5). ##### [460-10-25-3](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:e53f6d4d1dec13b0c5efd9003fdb886ad24fd98fe81dbfb379de06732a637209 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the issuance of a guarantee imposes a noncontingent obligation to stand ready to perform in the event that the specified triggering events or conditions occur, the provisions of Section 450-20-25 regarding a guarantor's contingent obligation under a guarantee should not be interpreted as prohibiting a guarantor from initially recognizing a liability for a guarantee even though it is not [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") that payments will be required under that guarantee. Similarly, for guarantees within the scope of Subtopic 326-20, the requirement to measure a guarantor's expected credit loss on the guarantee should not be interpreted as prohibiting a guarantor from initially recognizing a liability for the noncontingent aspect of a guarantee. ##### [460-10-25-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:d97a45553591887c209b47c681d05553c5d13d5a26468264f867b4d931a5a822 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the inception of a guarantee, a guarantor shall recognize in its statement of financial position a liability for that guarantee. This Subsection does not prescribe a specific account for the guarantor's offsetting entry when it recognizes a liability at the inception of a guarantee. That offsetting entry depends on the circumstances in which the guarantee was issued. See paragraph [460-10-55-23](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-23) for implementation guidance. ### Product Warranties #### Warranty Obligations Incurred in Connection with the Sale of Goods or Services ##### [460-10-25-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:82d623f5dca14e0f96437a87e0c40f496a83f4b10e2fe6fcc1fb77a8aab6dda0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because of the uncertainty surrounding claims that may be made under warranties, [warranty](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place.") obligations fall within the definition of a [contingency](https://asc.understandingaccounting.org/glossary/c/#contingency "An existing condition, situation, or set of circumstances involving uncertainty as to possible gain (gain contingency) or loss (loss contingency) to an entity that will ultimately be resolved when one or more future events occur or fail to occur."). Losses from warranty obligations shall be accrued when the conditions in paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2) are met. ##### [460-10-25-6](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:14e364f5a261419b0dde146c9f3b5b8994e264e7e9089bc88d42e82101044748 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The condition in paragraph [450-20-25-2(a)](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2) is met at the date of an entity's financial statements if, based on available information, it is [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") that customers will make claims under warranties relating to goods or services that have been sold. Satisfaction of the condition in paragraph [450-20-25-2(b)](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2) will normally depend on the experience of an entity or other information. In the case of an entity that has no experience of its own, reference to the experience of other entities in the same business may be appropriate. Inability to make a reasonable estimate of the amount of a warranty obligation at the time of sale because of significant uncertainty about possible claims (that is, failure to satisfy condition \[b\] in that paragraph) precludes accrual and, if the range of possible loss is wide, may raise a question about whether a sale should be recorded before expiration of the warranty period or until sufficient experience has been gained to permit a reasonable estimate of the obligation. ##### [460-10-25-7](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:0681853770b0e3718f7e030193a6b1c3464bb74208e7f706d06d8ca5f930fa95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The conditions in paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2) may be considered in relation to individual sales made with warranties or in relation to groups of similar types of sales made with warranties. If those conditions are met, accrual shall be made even though the particular parties that will make claims under warranties may not be identifiable. #### Separately Priced Extended Warranty or Product Maintenance Contracts ##### [460-10-25-8](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:77f509fc69f38d8399271b8dd191f578f8a1119ad7ffb981588d79c731f65767 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Topic 606 on [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."), and specifically the guidance on warranties in paragraphs [606-10-55-30 through 55-35](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-30) , provide guidance on revenue recognition by sellers of 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. ##### [460-10-25-8A](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-8A) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:39.283Z to 2026-09-10T00:29:39.283Z Record version: sha256:09016df9af1caa0644d12fb5223503a69f624816d60abb570ca023abdc18785f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [605-20-25-6](https://asc.understandingaccounting.org/asc/605/20/#605-20-25-6) provides guidance on recognizing a loss on separately priced extended warranty and product maintenance contracts. Source downloaded (UTC): 2026-09-10T00:29:41.991Z to 2026-09-10T00:29:41.991Z Record version: sha256:2b8086cbe9d6f568b695a1838d1f3537c07e61958d984b775bfb4e16ebf2f0dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/460/10/#30-initial-measurement) SEC content: no ##### [460-10-30-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:41.991Z to 2026-09-10T00:29:41.991Z Record version: sha256:88aaf9b5aac34405a231248102e22304e2c9954a9312319d60e7cffce5f10a13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The types of guarantees identified in paragraph [460-10-25-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-1) are not subject to the initial measurement provisions of this Subsection. #### Fair Value Objective ##### [460-10-30-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:41.991Z to 2026-09-10T00:29:41.991Z Record version: sha256:005ad516b6790f3bceadcb755b5026e0f876dbb47c0401a81e2f1ad9b612a1de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except as indicated in paragraphs [460-10-30-3 through 30-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-3) , the objective of the initial measurement of a guarantee liability is the fair value of the guarantee at its inception. For example: 1. a If a guarantee is issued in a standalone arm's-length transaction with an unrelated party, the liability recognized at the inception of the guarantee shall be the premium received or receivable by the guarantor as a practical expedient. 2. b If a guarantee is issued as part of a transaction with multiple elements with an unrelated party (such as in conjunction with selling an asset), the liability recognized at the inception of the guarantee should be an estimate of the guarantee's fair value. In that circumstance, a guarantor shall consider what premium would be required by the guarantor to issue the same guarantee in a standalone arm's-length transaction with an unrelated party as a practical expedient. 3. c If a guarantee is issued as a contribution to an unrelated party, the liability recognized at the inception of the guarantee shall be measured at its fair value, consistent with the requirement to measure the contribution made at fair value, as prescribed in Section 720-25-30. For related implementation guidance, see paragraph [460-10-55-14](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-14). #### Guarantees Not within the Scope of Subtopic 326-20 ##### [460-10-30-3](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:41.991Z to 2026-09-10T00:29:41.991Z Record version: sha256:3b3114e238644ccc9005a16b6649b5161fbc51911f68ed73b8c0ca9ac87e4733 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the event that, at the inception of the guarantee, the guarantor is required to recognize a liability under Section 450-20-25 for the related contingent loss, the liability to be initially recognized for that guarantee shall be the greater of the following: 1. a The amount that satisfies the fair value objective as discussed in the preceding paragraph 2. b The contingent liability amount required to be recognized at inception of the guarantee by Section 450-20-30. ##### [460-10-30-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:41.991Z to 2026-09-10T00:29:41.991Z Record version: sha256:003b75b30e557b01d82849209ad2ba6a8751594a7a91d33e36a9ef344c8a52b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For many guarantors, it would be unusual at the inception of the guarantee for the contingent liability amount under (b) in the preceding paragraph to exceed the amount that satisfies the fair value objective under (a) in the preceding paragraph. An example of that unusual circumstance is a guarantee for which, at inception, there is a high ([probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.")) likelihood that the guarantor will be required to pay the maximum potential settlement at the end of the six-month term and a low likelihood that the guarantor will not be required to make any payment at the end of the six-month term. The amount that satisfies the fair value objective would include consideration of the low likelihood that no payment will be required, but the accrual of the contingent loss under Section 450-20-30 would be based solely on the best estimate of the settlement amount whose payment is probable (the maximum potential settlement amount in this case). This example is considered to be an unusual circumstance because of the high likelihood at inception that the maximum potential settlement amount will be paid, resulting in a substantial initial fair value for that guarantee. Another example in which the contingent liability amount required to be recognized under (b) in the preceding paragraph exceeds the fair value at inception under (a) in the preceding paragraph would involve an undiscounted accrual under Subtopic 450-20 for a guarantee payment that is expected to occur many years in the future. #### Guarantees within the Scope of Subtopic 326-20 ##### [460-10-30-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:41.991Z to 2026-09-10T00:29:41.991Z Record version: sha256:d635a09f5fab3bd3af3031afaf851f2658608363a0f0b32bee97b44b9ce08039 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the inception of a guarantee within the scope of Subtopic 326-20 on financial instruments measured at amortized cost, the guarantor is required to recognize both of the following as liabilities: 1. a The amount that satisfies the fair value objective in accordance with paragraph [460-10-30-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-2) 2. b The contingent liability related to the expected credit loss for the guarantee measured under Subtopic 326-20. Source downloaded (UTC): 2026-09-10T00:29:44.042Z to 2026-09-10T00:29:44.042Z Record version: sha256:295743a724a4511764466e2aa6a64b1bf8168d17d380dff77153ca987e011305 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/460/10/#35-subsequent-measurement) SEC content: no ##### [460-10-35-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:44.042Z to 2026-09-10T00:29:44.042Z Record version: sha256:43d5593fd7fa8f5f7f14fc2903d0c0e6fabbcbddfecd2430ab050805c02920eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection does not describe in detail how the guarantor's liability for its obligations under the guarantee would be measured after its initial recognition. The liability that the guarantor initially recognized under paragraph [460-10-25-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-4) would typically be reduced (by a credit to earnings) as the guarantor is released from risk under the guarantee. ##### [460-10-35-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:44.042Z to 2026-09-10T00:29:44.042Z Record version: sha256:5ef4d5c668c381caa1a86501dcbb2883b1a57f37d63a62785a9866a0539a5a23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Depending on the nature of the guarantee, the guarantor's release from risk has typically been recognized over the term of the guarantee using one of the following three methods: 1. a Only upon either expiration or settlement of the guarantee 2. b By a systematic and rational amortization method 3. c As the fair value of the guarantee changes. Although those three methods are currently being used in practice for subsequent accounting, this Subsection does not provide comprehensive guidance regarding the circumstances in which each of those methods would be appropriate. A guarantor is not free to choose any of the three methods in deciding how the liability for its obligations under the guarantee is measured subsequent to the initial recognition of that liability. A guarantor shall not use fair value in subsequently accounting for the liability for its obligations under a previously issued guarantee unless the use of that method can be justified under generally accepted accounting principles (GAAP). For example, fair value is used to subsequently measure guarantees accounted for as derivative instruments under Topic 815. ##### [460-10-35-3](https://asc.understandingaccounting.org/asc/460/10/#460-10-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:44.042Z to 2026-09-10T00:29:44.042Z Record version: sha256:247437e079b730a05b25e364da8da2275b821191a1366cbf46f42676206815b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/) ##### [460-10-35-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:44.042Z to 2026-09-10T00:29:44.042Z Record version: sha256:b3e98389fadad9a1722e6bca5ebd3d2b71a7cb7d6e56db0278cc761532600f95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The discussion in paragraph [460-10-35-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-35-2) about how a guarantor typically reduces the liability that it initially recognized does not encompass the recognition and subsequent adjustment of the contingent liability related to the contingent loss for the guarantee. The contingent aspect of the guarantee shall be accounted for in accordance with Subtopic 450-20unless the guarantee is accounted for as a derivative instrument under Topic 815or the guarantee is within the scope of Subtopic 326-20 on financial instruments measured at amortized cost. For guarantees within the scope of Subtopic 326-20, the expected credit losses (the contingent aspect) of the guarantee shall be accounted for in accordance with that Subtopic in addition to and separately from the fair value of the guarantee liability (the noncontingent aspect) accounted for in accordance with paragraph [460-10-30-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-5). Source downloaded (UTC): 2026-09-10T00:29:45.866Z to 2026-09-10T00:29:45.866Z Record version: sha256:be1e708bb02db647205a991c894f2e4c914a4e941fadee00bd3d9a1be24ac32a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/460/10/#45-other-presentation-matters) SEC content: no ##### [460-10-45-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:45.866Z to 2026-09-10T00:29:45.866Z Record version: sha256:c38dd660fbbcb5767efe1127fa0f28a7c3d89120d4a22f22458f0770d9c725d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [326-20-45-2](https://asc.understandingaccounting.org/asc/326/20/#326-20-45-2) states that an accrual for credit loss on a financial instrument with off-balance-sheet risk (including financial guarantees and [financial standby letters of credit](https://asc.understandingaccounting.org/glossary/f/#financial-standby-letter-of-credit "An irrevocable undertaking (typically by a financial institution) to guarantee payment of a specified financial obligation.")) shall be a liability that is recorded separate from a valuation account related to a recognized financial instrument. Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:6888c884332fcddf754f584ba32840ba0695131fec7564141a1afa40d9fc42ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/460/10/#50-disclosure) SEC content: no #### Information about Each Guarantee or Group of Similar Guarantees ##### [460-10-50-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:264eddbd7e54141cc027fb5a148310df5c4457be1d1247434c1d0e38f2d5e171 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The requirements in paragraphs [460-10-50-2 through 50-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-2) apply to guarantees, including guarantees that are outside the scope of paragraph [460-10-15-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4); however, they do not apply to guarantees described in paragraph [460-10-15-7](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-7). ##### [460-10-50-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-2) Pending content: yes Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:30fee636e1b1f2f0cac8da62c7bc3e42a8718f9a77b7ee3f7e935e19d27eab78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose certain [loss contingencies](https://asc.understandingaccounting.org/glossary/l/#loss-contingency "An existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. The term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses.") 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: 1. a Guarantees of indebtedness of others, including [indirect guarantees of indebtedness](https://asc.understandingaccounting.org/glossary/i/#indirect-guarantee-of-indebtedness "An agreement that obligates the guarantor to transfer funds to a debtor upon the occurrence of specified events, under conditions whereby: After funds are transferred from the guarantor to the debtor, the funds become legally available to creditors through their claims against the debtor Those creditors may enforce the debtor's claims against the guarantor under the agreement. In contrast, with a direct guarantee of indebtedness, if the debtor defaults, the creditor has a direct claim on the guarantor. Examples of indirect guarantees include agreements to advance funds if a debtor's net income, coverage of fixed charges, or working capital falls below a specified minimum.") of others 2. b Obligations of commercial banks under standby letters of credit 3. c Guarantees to repurchase receivables (or, in some cases, to repurchase the related property) that have been sold or otherwise assigned 4. d Other agreements that in substance have the same guarantee characteristic. 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)For interim and annual reporting periods, an entity shall disclose certain [loss contingencies](https://asc.understandingaccounting.org/glossary/l/#loss-contingency "An existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. The term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses.") 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: 1. a Guarantees of indebtedness of others, including [indirect guarantees of indebtedness](https://asc.understandingaccounting.org/glossary/i/#indirect-guarantee-of-indebtedness "An agreement that obligates the guarantor to transfer funds to a debtor upon the occurrence of specified events, under conditions whereby: After funds are transferred from the guarantor to the debtor, the funds become legally available to creditors through their claims against the debtor Those creditors may enforce the debtor's claims against the guarantor under the agreement. In contrast, with a direct guarantee of indebtedness, if the debtor defaults, the creditor has a direct claim on the guarantor. Examples of indirect guarantees include agreements to advance funds if a debtor's net income, coverage of fixed charges, or working capital falls below a specified minimum.") of others 2. b Obligations of commercial banks under standby letters of credit 3. c Guarantees to repurchase receivables (or, in some cases, to repurchase the related property) that have been sold or otherwise assigned 4. d Other agreements that in substance have the same guarantee characteristic. ##### [460-10-50-3](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-3) Pending content: yes Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:8450eaae7f91216b6fd46256220a090005e74df7bea28c4ede0a1cc3c2850998 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. 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)For 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. ##### [460-10-50-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-4) Pending content: yes Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:80d625dc1963e80e256044cc433431e7925b44ada5b192e89f787f9cf6d9fe56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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: 1. a The nature of the guarantee, including all of the following: 1. 1 The approximate term of the guarantee 2. 2 How the guarantee arose 3. 3 The events or circumstances that would require the guarantor to perform under the guarantee 4. 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. 5 If the entity uses internal groupings for purposes of item (a)(4), how those groupings are determined and used for managing risk. 2. b All of the following information about the maximum potential amount of future payments under the guarantee: 1. 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. 2 If the terms of the guarantee provide for no limitation to the maximum potential future payments under the guarantee, that fact 3. 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. 3. 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 4. 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 5. 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 6. 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](https://asc.understandingaccounting.org/asc/460/10/#50-disclosure) of Section 460-10-50 for an exception to the requirements of (b). 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)For 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: 1. a The nature of the guarantee, including all of the following: 1. 1 The approximate term of the guarantee 2. 2 How the guarantee arose 3. 3 The events or circumstances that would require the guarantor to perform under the guarantee 4. 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. 5 If the entity uses internal groupings for purposes of item (a)(4), how those groupings are determined and used for managing risk. 2. b All of the following information about the maximum potential amount of future payments under the guarantee: 1. 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. 2 If the terms of the guarantee provide for no limitation to the maximum potential future payments under the guarantee, that fact 3. 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. 3. 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 4. 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 5. 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 6. 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](https://asc.understandingaccounting.org/asc/460/10/#50-disclosure) of Section 460-10-50 for an exception to the requirements of (b). #### Effect of the Guarantee Disclosure Requirements on the Disclosure Requirements of Other Topics ##### [460-10-50-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:8ee08f9652cbf62e01c95f0cd7d47f6b1f3a854556aa74b22318e445c9dd8738 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosures required by this Subsection do not eliminate or affect the following disclosure requirements: 1. a The requirements in the [General Subsection](https://asc.understandingaccounting.org/asc/825/10/#50-disclosure) of Section 825-10-50 that certain entities disclose the fair value of their financial guarantees issued 2. b The requirements in paragraphs [450-20-50-3 through 50-4](https://asc.understandingaccounting.org/asc/450/20/#450-20-50-3) that an entity disclose a contingent loss that has a reasonable possibility of occurring 3. c The requirements in the Disclosure Sections of Topic 815, which apply to guarantees that are accounted for as derivatives 4. d The requirements in Section 275-10-50 that an entity disclose information about risks and uncertainties that could significantly affect the amounts reported in the financial statements in the near term. See Example 1 (paragraph [460-10-55-25](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-25)) for an illustration of the required disclosure. 5. e The requirements in Section 326-20-50 that an entity disclose information on the measurement of credit loss. ##### [460-10-50-6](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:335b73ac2f5958813cba7e8d2eaffbe1986199c327ef47760f9221cfad6da1f8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some guarantees are issued to benefit entities that are [related parties](https://asc.understandingaccounting.org/glossary/r/#related-parties "Related parties include: Affiliates of the entity Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity Trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management Principal owners of the entity and members of their immediate families Management of the entity and members of their immediate families Other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.") such as joint ventures, equity method investees, and certain entities for which the controlling financial interest cannot be assessed by analyzing voting interests. In those cases, the disclosures required by this Topic are incremental to the disclosures required by Topic 850. ### Product Warranties ##### [460-10-50-7](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:769706dd21fd36538482c7cb74b40156d5286400662585f5eb256cedefc9d43a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [460-10-25-6](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-6) states that an inability to make a reasonable estimate of the amount of a [warranty](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place.") obligation at the time of sale because of significant uncertainty about possible claims precludes accrual. That paragraph also addresses related implications. Paragraphs [450-20-50-3 through 50-6](https://asc.understandingaccounting.org/asc/450/20/#450-20-50-3) provide disclosure guidance for circumstances in which no accrual is made for a [loss contingency](https://asc.understandingaccounting.org/glossary/l/#loss-contingency "An existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. The term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses."). In those circumstances, the disclosures required by that paragraph shall be made. ##### [460-10-50-8](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-8) Pending content: yes Source downloaded (UTC): 2026-09-10T00:29:48.053Z to 2026-09-10T00:29:48.053Z Record version: sha256:b379b8ebbce6aea3da190e6fdb236a9328b7cb3fedc4d9c927af29db5af1c73d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A guarantor shall disclose all of the following information for product warranties and other guarantee contracts described in paragraph [460-10-15-9](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-9): 1. a The information required to be disclosed by paragraph [460-10-50-4](https://asc.understandingaccounting.org/asc/460/10/#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)](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-4) 2. b The guarantor's accounting policy and methodology used in determining its liability for product warranties 3. 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. 1 The beginning balance of the aggregate product warranty liability 2. 2 The aggregate reductions in that liability for payments made (in cash or in kind) under the warranty 3. 3 The aggregate changes in the liability for accruals related to product warranties issued during the reporting period 4. 4 The aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates) 5. 5 The ending balance of the aggregate product warranty liability. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)A guarantor shall disclose all of the following information for product warranties and other guarantee contracts described in paragraph [460-10-15-9](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-9): 1. a The information required to be disclosed by paragraph [460-10-50-4](https://asc.understandingaccounting.org/asc/460/10/#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)](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-4) 2. b The guarantor's accounting policy and methodology used in determining its liability for product warranties 3. 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. 1 The beginning balance of the aggregate product warranty liability 2. 2 The aggregate reductions in that liability for payments made (in cash or in kind) under the warranty 3. 3 The aggregate changes in the liability for accruals related to product warranties issued during the reporting period 4. 4 The aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates) 5. 5 The ending balance of the aggregate product warranty liability. See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. 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)For 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](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-9): 1. a The information required to be disclosed by paragraph [460-10-50-4](https://asc.understandingaccounting.org/asc/460/10/#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)](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-4) 2. b The guarantor's accounting policy and methodology used in determining its liability for product warranties 3. 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. 1 The beginning balance of the aggregate product warranty liability 2. 2 The aggregate reductions in that liability for payments made (in cash or in kind) under the warranty 3. 3 The aggregate changes in the liability for accruals related to product warranties issued during the reporting period 4. 4 The aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates) 5. 5 The ending balance of the aggregate product warranty liability. See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:18aeb38e739b8e97bbdd60896865270edd601c35dcaa3438a4c17f452f8d4d61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/460/10/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [460-10-55-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:75bac086da3f0293c46430d77f0e11625cafa8fd7d2d72a63910c9b95f59b87a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The implementation guidance for guarantees within the scope of this Topic is organized as follows: 1. a Financial guarantees, which contains scope guidance for paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) 2. b Performance guarantees, which contains scope guidance for paragraph [460-10-15-4(b)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) 3. c Indemnifications, which contains scope guidance for paragraph [460-10-15-4(c)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) 4. d [Indirect guarantees of the indebtedness](https://asc.understandingaccounting.org/glossary/i/#indirect-guarantee-of-indebtedness "An agreement that obligates the guarantor to transfer funds to a debtor upon the occurrence of specified events, under conditions whereby: After funds are transferred from the guarantor to the debtor, the funds become legally available to creditors through their claims against the debtor Those creditors may enforce the debtor's claims against the guarantor under the agreement. In contrast, with a direct guarantee of indebtedness, if the debtor defaults, the creditor has a direct claim on the guarantor. Examples of indirect guarantees include agreements to advance funds if a debtor's net income, coverage of fixed charges, or working capital falls below a specified minimum.") of others, which contains scope guidance for paragraph [460-10-15-4(d)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4). The lists that follow are not intended to be all-inclusive. ##### [460-10-55-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:9ec026b89404705d408fb3583b1ab4629f8ba22a163709df4aaf02bd03d251d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of contracts of the type described in paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4): 1. a A [financial standby letter of credit](https://asc.understandingaccounting.org/glossary/f/#financial-standby-letter-of-credit "An irrevocable undertaking (typically by a financial institution) to guarantee payment of a specified financial obligation.") 2. b A market value guarantee on either a financial asset (such as a security) or a nonfinancial asset owned by the guaranteed party 3. c A guarantee of the market price of the common stock of the guaranteed party 4. d A guarantee of the collection of the scheduled contractual cash flows from individual financial assets held by a special-purpose entity 5. e A guarantee granted to a business or its owner(s) that the revenue of the business (or a specific portion of the business) for a specified period of time will be at least a specified amount. ##### [460-10-55-3](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:b91f51dcf16aee31c0d538ace3bfd0bcd7f7c44d77a30f9817084ada955fa221 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Option-based contracts in which any net potential contingent payment can flow only from the guarantor to the guaranteed party may meet one of the characteristics in paragraph [460-10-15-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) and be included in the scope of this Topic. (Some guarantees obligate the guaranteed party to pay all or a portion of the premium to the guarantor at a later date; those premium payments are not contingent payments as discussed in the previous sentence.) ##### [460-10-55-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:a33dc53919a30765889483b2614dd6ac4174045e88b2f6ccfc322d828a3d6bee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A put option is a market value guarantee because it gives the holder the right to sell a specified quantity of an asset related to the [underlying](https://asc.understandingaccounting.org/glossary/u/#underlying "A specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, or other variable (including the occurrence or nonoccurrence of a specified event such as a scheduled payment under a contract). An underlying may be a price or rate of an asset or liability but is not the asset or liability itself. An underlying is a variable that, along with either a notional amount or a payment provision, determines the settlement of a derivative instrument.") to the writer of the option at a specified price (strike price) up to the expiration date. For example, paragraphs [860-20-55-20 through 55-23](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-20) address the interaction of various Subtopics (including this Subtopic) in accounting for transactions that involve sale of a marketable security to a third-party buyer, with the buyer's having an option to put the security back to the seller at a specified future date or dates for a fixed price. ##### [460-10-55-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:b09919b74138e71fd39d4f0652adb108bb45a2ea796bbcc36811c71b15b2db01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) states that the provisions of this Topic apply to a guarantee contract that contingently requires a guarantor to make payments 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. This paragraph addresses whether the characteristic in paragraph 460-10-15-4(a) is met for a put option written by a guarantor that did not know whether the guaranteed party had an asset or liability related to the underlying described in paragraph 460-10-15-4(a). If, upon exercise, the put option requires gross settlement and the asset to be delivered under gross settlement is related to the underlying described in paragraph 460-10-15-4(a), characteristic (a) in paragraph 460-10-15-4 shall be considered to be met. ##### [460-10-55-6](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:3aaf1120387682d22552e66da8fa42be5cd41511d7b2fb6b18d61f391c2e9535 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if an investor entered into two separate contracts—a nonputtable bond and a freestanding put option contract that can be settled only by delivery of the bond—and was accounting for those contracts separately, that freestanding put option contract would be a guarantee that meets the characteristic in paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4). ##### [460-10-55-7](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:ecc82a6add5dbb401548bf61c61cc0e43a61e90d2b597558a4ffcac7e62ebcef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In contrast, if a put option permits or requires net settlement, the guarantor must consider its business relationship with the guaranteed party and the other circumstances involved in the issuance of the put option in deciding whether it is [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") that the guaranteed party has, on or about the date of the put option's issuance, an asset or liability related to the underlying described in paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4). If the guarantor has no basis for concluding that it is probable that the guaranteed party has that asset or liability, the characteristic in that paragraph would not be met for that written put option and it would not be within the scope of this Topic. ##### [460-10-55-8](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:ee530e977bc3c7296c650164a9102697191100f2b6e44e48c660513231c227f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a put option that permits or requires net settlement and for which the characteristic in paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) is considered to be met at inception, the guarantor shall continue complying with the disclosure requirements of the [General Subsection](https://asc.understandingaccounting.org/asc/460/10/#50-disclosure) of Section 460-10-50 over the term of the put option without an ongoing assessment of whether the guaranteed party continues to have the related asset or liability over that period. ##### [460-10-55-9](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:13fc7783c2de9a133fe09510598902bafdb2bb013f319eb3b05cf892c78588f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Contingent forward contracts may meet one of the characteristics in paragraph [460-10-15-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) and be included in the scope of this Topic. A freestanding put option contract that can be settled only by delivery of the asset related to the underlying could be viewed as a contingent forward contract. ##### [460-10-55-10](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:19e10756da2d9445b1d40c9e9ce9d47f7def80edd89b6b35bf6526d1933eb195 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An example of the type of guarantee described in paragraph [460-10-55-2(e)](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-2) is a [minimum revenue guarantee](https://asc.understandingaccounting.org/glossary/m/#minimum-revenue-guarantee "A guarantee granted to a business or its owners that the revenue of the business (or a specific portion of the business) for a specified period of time will be at least a specified minimum amount.") granted to a new day-care center by a corporation as an incentive for the center to locate near the corporation's main plant. The corporation, as the guarantor, has agreed to make monthly payments to the day-care center (the guaranteed party) over a specified term for any shortfall from the guaranteed minimum amount of revenue for each month. ##### [460-10-55-11](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:6eba1d969c7ecbc90c995219208546c6bdd6491b17e17c63ec6d5198b9654e54 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Another example is a guarantee granted to a nonemployee physician by a not-for-profit health care facility that has recruited the physician to move to the facility's geographical area to establish a practice. The health care facility, as the guarantor, has agreed to make payments to the newly arrived physician (the guaranteed party) at the end of specific periods of time if the gross revenues (gross receipts) generated by the physician's new practice during that period of time do not equal or exceed a specific dollar amount. This Topic applies to minimum revenue guarantees granted to physicians regardless of whether the physician's practice qualifies as a [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business."). ##### [460-10-55-12](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:73a442df0cc4e6d69e610db8462a07a7d43a9014b5d5f97b682dd768a20481c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of contracts of the type described in paragraph [460-10-15-4(b)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4): 1. a [Performance standby letters of credit](https://asc.understandingaccounting.org/glossary/p/#performance-standby-letter-of-credit "An irrevocable undertaking by a guarantor to make payments in the event a specified third party fails to perform under a nonfinancial contractual obligation.") 2. b Bid bonds 3. c Performance bonds 4. d Other contracts that are similar to performance standby letters of credit. ##### [460-10-55-13](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:33d93309c0949176ee649a43f1c9803d8ff3e0c70d3acbf72914b4962844ee21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of contracts of the type described in paragraph [460-10-15-4(c)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4): 1. a An indemnification agreement (contract) that contingently requires the indemnifying party (guarantor) to make payments to the indemnified party (guaranteed party) based on an adverse judgment in a lawsuit or the imposition of additional taxes due to either a change in the tax law or an adverse interpretation of the tax law. 2. b A lessee's indemnification of the lessor for any adverse tax consequences that may arise from a change in the tax laws, because only a legislative body can change the tax laws, and the lessee therefore has no control over whether payments will be required under that indemnification. In contrast, as discussed in paragraph [460-10-55-18(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-18), when a lessee indemnifies a lessor against adverse tax consequences that may arise from acts, omissions, and misrepresentations of the lessee, that indemnification is outside the scope of this Topic because the lessee is, in effect, guaranteeing its own future performance. 3. c A seller's indemnification against additional income taxes due for years before a business combination, because the indemnification relates to the seller-guarantor's past performance, not its future performance. ##### [460-10-55-14](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:c820f43a68b9ed492760cd53081f6b5c87463083e554c9a188618e14d5e9828c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is an example of a contract of the type described in paragraph [460-10-15-4(d)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4). ##### [460-10-55-15](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:9ce228a44ec09f6bc9676f6b8d0ad65e64c73dbe876af7c48058b3dc837c3471 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A community foundation has a loan guarantee program to assist not-for-profit entities (NFPs) in obtaining bank financing at a reasonable cost. Under that program, the community foundation issues a guarantee of an NFP's bank debt. That guarantee is within the scope of this Topic, and on the issuance of the guarantee, the community foundation would recognize a liability for the [fair value](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.") of that guarantee. The issuance of that guarantee would not be considered merely a conditional promise to give under paragraphs [958-605-25-11 through 25-13](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-11) because, upon the issuance of the guarantee, the NFP will have received the gift of the community foundation's credit support. That credit support enables the NFP to obtain a lower interest rate on its borrowing. ##### [460-10-55-16](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:e24b06862830b3b58e1e7a21ba52718da981fc63341d436feff7f29f525c5fee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of contracts that are outside the scope of this Topic because they are not of any of the types described in paragraph [460-10-15-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4): 1. a [Commercial letters of credit](https://asc.understandingaccounting.org/glossary/c/#commercial-letter-of-credit "A document issued typically by a financial institution on behalf of its customer (the account party) authorizing a third party (the beneficiary), or in special cases the account party, to draw drafts on the institution up to a stipulated amount and with specified terms and conditions; it is a conditional commitment (except if prepaid by the account party) on the part of the institution to provide payment on drafts drawn in accordance with the terms of the document.") and other loan commitments, which are commonly thought of as guarantees of funding, are not included in the scope of this Topic because those instruments do not guarantee payment of a money obligation and do not provide for payment in the event of default by the account party. 2. b A noncontingent forward contract for which net settlement could involve a net settlement payment from either party is not included in the scope of this Topic. However, as discussed in paragraph [460-10-55-9](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-9), a contingent forward contract may meet one of the characteristics in paragraph [460-10-15-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) and be included in the scope of this Topic. 3. c A guarantee provision in a financial instrument that is commonly thought of as a market value guarantee of the other terms of that same financial instrument is not within the scope of this Topic unless that guarantee provision is accounted for separately as a derivative under Topic 815 (see paragraph [460-10-25-1(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-1)). For example, a put option that is embedded in a puttable bond (but is not accounted for separately as a derivative) could be viewed by the investor (the guaranteed party) as a guarantee against the fair value of the remaining instrument (a bond absent the put option) declining below the put price. The embedded put option does not meet the characteristic in paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) because the guaranteed party's asset is an investment in the entire contract, a puttable bond, and not an investment in a nonputtable bond. However, as noted in paragraph [460-10-55-6](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-6), if the investor purchased a freestanding put option on a nonputtable bond and accounted for them separately, that guarantee would be within the scope of this Topic. 4. d An arrangement, such as a securitization, that involves the subordination of the rights of some investors (or creditors) to the rights of others is commonly thought of as a guarantee issued by the subordinated investors. For example, the investors in one (subordinated) class or tranche of an entity's securities might not receive any cash flows until the investors in another (priority) class or tranche are fully paid. Although that type of subordination provides credit protection by the subordinated investors, it does not meet any of the characteristics in paragraph [460-10-15-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) and, thus, is not included in the scope of this Topic. 5. e A written option that does not directly guarantee another entity's performance or the fair value of the guaranteed party's assets (such as a [weather derivative](https://asc.understandingaccounting.org/glossary/w/#weather-derivative "A forward-based or option-based contract for which settlement is based on a climatic or geological variable. One example of such a variable is the occurrence or nonoccurrence of a specified amount of snow at a specified location within a specified period of time.")) is not included in the scope of this Topic unless that written option is used as an indirect guarantee of the indebtedness of others. 6. f A [take-or-pay contract](https://asc.understandingaccounting.org/glossary/t/#take-or-pay-contract "An agreement between a purchaser and a seller that provides for the purchaser to pay specified amounts periodically in return for products or services. The purchaser must make specified minimum payments even if it does not take delivery of the contracted products or services.") is not included in the scope of this Topic because the minimum payments under a take-or-pay contract are not contingent. A take-or-pay contract requires certain minimum payments irrespective of whether the buyer accepts delivery. Even if a take-or-pay contract were analyzed as though it were a guarantee by the buyer to pay for the portion of the minimum quantity of product or output of the guaranteed party for which the buyer refuses to order or accept delivery, a take-or-pay contract would not be included in the scope of this Topic because it would be a guarantee related to the buyer's future performance under the contract. (Take-or-pay contracts are further discussed in the Unconditional Purchase Obligations Subsections of Subtopic 440-10.) 7. g A weather derivative is not included in the scope of this Topic because the climatic or geological variable is not an asset or liability of the guaranteed party. The characteristic in paragraph [460-10-15-4(a)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4) requires payments to be based on changes in an underlying that is related only to an asset or liability of the guaranteed party. ##### [460-10-55-17](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:6c36e39aed93820bb53c7483fc615a5a3d14749d3e5d62536a4fd14e623bf56b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is an example of a contract that is outside the scope of this Topic because it is of the type described in paragraph [460-10-15-7(g)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-7). 1. a [Subparagraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/). 3. c A transaction that involves sale of a marketable security to a third-party buyer with the buyer having an option to put the security back to the seller at a specified future date or dates for a fixed price, if the existence of the put option prevents the transferor from accounting for the transaction as a sale, as described in paragraphs [860-20-55-20 through 55-23](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-20) . 4. d [Subparagraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/). 5. e [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [460-10-55-18](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:26a8df24af455b171d777ef88a39ec7a6c1b6740e6f109e726ebb8ab0d24979f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of contracts that are outside the scope of this Topic because these contracts are of the type described in paragraph [460-10-15-7(i)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-7): 1. a A lessee will often indemnify a lessor for any adverse tax consequences that may arise from acts, omissions, and misrepresentations of the lessee (for example, using the leased asset outside the United States or subleasing to a tax-exempt entity). The lessee is, in effect, guaranteeing that its own future performance and actions with respect to the lease and the leased property will not result in adverse tax consequences to the lessor. Thus, that lessee's indemnification is not within the scope of this Topic. In contrast, as discussed in paragraph [460-10-55-13(b)](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-13), a guarantee by a lessee regarding the effect of future changes in the tax law on the guaranteed party's tax liability is within the scope of this Topic because the lessee cannot change the tax law (or prevent a change) and thus cannot control whether payments will be required under the guarantee. 2. b An entity's guarantee of its own future performance, such as that entity's completion of a contract by a specified deadline is not within the scope of this Topic. 3. c In consolidated financial statements, a parent's guarantee of a subsidiary's debt to a third party would simply be a guarantee of the consolidated entity's own performance to make the scheduled payments on that consolidated liability, which is not a guarantee within the scope of this Topic for the consolidated reporting entity. ##### [460-10-55-19](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:33b31617a77f4f4d1c2f62b1d024a06e0113eaa6bef69b0312d15f2964cfb345 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is an example of a contract that is not subject to the General Subsections of Sections 460-10-25 and 460-10-30 because it is of one of the types described in paragraph [460-10-25-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-1). The contract is subject to the [General Subsection](https://asc.understandingaccounting.org/asc/460/10/#50-disclosure) of Section 460-10-50. ##### [460-10-55-20](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:d5b2d8a9e0dc241d1105498025c84ca6e97ea7b8bf9778ee937e4111270a960f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a guarantee contract stipulates that the guarantor's payment, if required, can be in the form of the guarantor's own equity shares at the guarantor's option, that obligation may, depending on the arrangements of the contract, be considered to be equity rather than a liability and, if so, the guarantee contract meets the characteristic in paragraph [460-10-25-1(d)](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-1). To determine if a contract would be considered equity or a liability, see Topic 480 and Topic 505. See paragraph [460-10-55-24](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-24) if the guarantor's shares are placed in a trust or in some other similar arrangement to facilitate performance under the guarantee. ##### [460-10-55-21](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:44889e242c0ebdfc729f5bd33f89ee1f5bc203f5823d584855534d0274f7cea5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In many cases, the one-time premium received by a guarantor for issuing a guarantee will be an appropriate practical expedient for the initial measurement of the guarantee obligation (see paragraph [460-10-30-2\[a\]](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-2)). However, if a one-time premium is specified for a guarantee that is issued in conjunction with another transaction (such as the sale of assets by the guarantor), the specified premium may not be an appropriate initial measurement of the guarantor's liability because the amount specified as being applicable to the guarantee may or may not be its fair value (see paragraph [460-10-30-2\[b\]](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-2)). ##### [460-10-55-22](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:5e1a220223d5adbd8fef49a5c6bcdeaea58f7754a5e5d044654115a8b46c68ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accordance with paragraph [460-10-30-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-30-2), a liability shall be recognized at the inception of the guarantee even if the guarantor does not receive a separately identified premium when it issues the guarantee. For example, in conjunction with the cash sale of equipment to a customer, a manufacturer may issue to its customer's bank a guarantee of the customer's loan for which the proceeds are used to pay for the equipment. There is no separately identified premium for the guarantee, although the sales arrangement may impound an implicit premium. The manufacturer may simply view the guarantee as an accommodation to its customer. The seller-guarantor has incurred an obligation identical to the obligation it would incur if it required its customer to pay an explicit premium for the guarantee. Thus, the seller-guarantor shall immediately recognize a liability for its obligations under a newly issued guarantee, even if a separately identified premium was not received. If an entity guaranteed a customer's bank loan purely as an accommodation to an important longstanding customer, unrelated to a specific transaction, the liability for the entity's obligations under the guarantee should be recognized. ##### [460-10-55-23](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:66c71d99c86996a5eb80fafa08fdc66e70b8586fbd488fd4bccb86772b02e136 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although paragraph [460-10-25-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-4) does not prescribe a specific account, the following illustrate a guarantor's offsetting entries when it recognizes the liability at the inception of the guarantee: 1. a If the guarantee were issued in a standalone transaction for a premium, the offsetting entry would be consideration received (such as cash or a receivable). 2. b If the guarantee were issued in conjunction with the sale of assets, a product, or a business, the overall proceeds (such as the cash received or receivable) would be allocated between the consideration being remitted to the guarantor for issuing the guarantee and the proceeds from the sale. That allocation would affect the calculation of the gain or loss on the sale transaction. 3. c If the guarantee were issued in conjunction with the formation of a partially owned business or a venture accounted for under the equity method, the recognition of the liability for the guarantee would result in an increase to the carrying amount of the investment. 4. d [Subparagraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/). 5. e If a guarantee were issued to an unrelated party for no consideration on a standalone basis (that is, not in conjunction with any other transaction or ownership relationship), the offsetting entry would be to expense. ##### [460-10-55-23A](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-23A) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:e2016926b962502886c26d068fde4ffab47a65a7266fc4a83d8b9aa803c35070 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses the application of this Subtopic to the recognition and initial measurement of a tax indemnification provided by a lessee to a lessor. Paragraph [460-10-25-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-4) requires that the lessee (guarantor) account for a tax indemnification provided to the lessor by recognizing a liability at lease inception (which is also the inception of the indemnification clause). Section 460-10-30 requires that the measurement objective of that initial recognition be the fair value of the lessee's obligation under the indemnification agreement. ##### [460-10-55-24](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:f4debcf2ecdb50af7c8a4e46355d45bce6af4f696ef12f51a0278b6bfdc11ae9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under some arrangements, a loss under a guarantee is settled by the guarantor's issuing a variable number of its own equity shares. Those arrangements are often called share-trust or share-collateral transactions, whereby some specified number of the guarantor's shares is put in a trust or in some other similar arrangement to facilitate performance under the guarantee. The use of collateral arrangements under that guarantee does not change the accounting for the guarantee; thus, those arrangements are subject to the recognition, measurement, and disclosure requirements of this Topic and Topic 450. See paragraph [460-10-55-20](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-20) for additional scope guidance. Furthermore, those arrangements also could affect the calculation of earnings per share (EPS) under Topic 260 and disclosures thereunder. #### Illustrations ##### [460-10-55-25](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:b0ae4ca0d98e6430f5fd95bb596b832fa6caa864b31a2c5486f9e1fea094c03a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosure required by paragraph [275-10-50-15(j)](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-15) of the potential near-term effect of a change in estimate of a contingent liability resulting from the guarantee of the debt of another entity. Entity A's loss of customers causes the potential for a near-term material change in that estimate within the next fiscal year. Although disclosure of Entity A's ongoing efforts to replace those customers is not required, this additional information may be presented. ##### [460-10-55-26](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:ddda50969d622e03fabd74fdc8e4ac33b70048ac856f415d5cc5166abf1fe480 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A operates a shipping center in Local City. In 19X0, Entity A decided to raise money for modernization of facilities through a debt offering. In order for the offering to take place, Entity B, a local manufacturer, agreed to guarantee the bonds if Entity A's revenues were insufficient to pay debt service. In May 19X4 (four years later when the bonds had an outstanding balance of $55 million), Entity A lost two of its major shipping customers, constituting 35 percent of its prior-year revenues, to a competitor in a neighboring port. At Entity B's June 30, 19X4, year end, Entity A was directing substantial efforts toward finding new customers. It is reasonably possible, however, that Entity A will not replace the lost revenue in time to pay debt service installments at December 30, 19X4, and June 30, 19X5, totaling $6 million. ##### [460-10-55-27](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:d52a51f5ae40337f3c15be4ef251784d4b56e24750e291cd0355a20bc0f04a2e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity B would make the following disclosure. - In 19X0, Entity B guaranteed the Series AA debt of Entity A, which operates a shipping center within Local City. Entity B continues as guarantor of such debt totaling $55 million. In May 19X4, Entity A lost two of its major customers. Although Entity A is directing substantial efforts toward obtaining new customers, it is at least reasonably possible that Entity A will not replace lost revenues sufficient to make its December 19X4 and June 19X5 debt service payments totaling $6 million. If so, Entity B will become responsible for repayment of at least a portion of that amount and possibly additional amounts over the debt term. A liability of $XX has been reported in Entity B's financial statements pending the outcome of Entity A's efforts during the next fiscal year. ### Product Warranties #### Implementation Guidance ##### [460-10-55-28](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:03ce4e14a02417d9ff0ce9436bbfc9cbf9bf8f920934b4cefffcd04b70585da1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A representation by a manufacturer to its customer that a particular engine would produce a specified savings in its energy consumption qualifies for the scope exception in paragraph [460-10-25-1(b)](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-1) because that representation relates to how efficiently the engine operates. ##### [460-10-55-29](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:04b5ac8fc740adaa67fcbdad68ec496a54247325edeb7ecd03e31c4eecbc4b2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In contrast, a service provider's representation as to the quality of its services does not need to qualify for that scope exception because it is a guarantee of the service provider's (guarantor's) future performance and, as such, is excluded from the scope of this Topic by paragraph [460-10-15-7(i)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-7). #### Illustrations ##### [460-10-55-30](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:a8b33d57f66d5083af562c437f29204a68547bea18e9443d6c3dd2720c2a36af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the scope of this Topic to a licensee indemnification. ##### [460-10-55-31](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:1e3253728b76996e39c221bf08de1d8125c28fdce62d00093ca56a60c23e7736 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As an element of its standard commercial terms, a software vendor-licensor includes an indemnification clause in a software licensing agreement that indemnifies the licensee against liability and damages (including legal defense costs) arising from any claims of patent, copyright, trademark, or trade secret infringement by the software vendor's software. That indemnification arrangement constitutes a guarantee that is not subject to the recognition requirements or the initial measurement requirements of the General Subsections of Sections 460-10-25 or 460-10-30, respectively. ##### [460-10-55-32](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:50968bba0dab3ced7d440dd28c03339956b9b1923c4b4b7dfb08cd69b0b6a469 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. That arrangement exhibits the characteristic in paragraph [460-10-15-4(c)](https://asc.understandingaccounting.org/asc/460/10/#460-10-15-4): the indemnification obligates the seller-licensor (guarantor) to make a payment to the buyer-licensee (guaranteed party) based on changes in an [underlying](https://asc.understandingaccounting.org/glossary/u/#underlying "A specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, or other variable (including the occurrence or nonoccurrence of a specified event such as a scheduled payment under a contract). An underlying may be a price or rate of an asset or liability but is not the asset or liability itself. An underlying is a variable that, along with either a notional amount or a payment provision, determines the settlement of a derivative instrument.") related to the software license (an asset of the guaranteed party). In this situation, the underlying is the occurrence of an infringement claim against the licensee that results in any liabilities or damages related to the licensed software (the asset) of the licensee (the indemnified party). ##### [460-10-55-33](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:d57f38b96d8d61318431010d9ebc6d4e92b83078cfab9d7fc9efcd2d460ab6ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nonetheless, because a possibility exists, regardless of how remote, that an infringement claim covered by the indemnification could impair the licensee's ability to use the licensed software (for example, if an injunction is issued or the claim is ultimately proven), the underlying is also related to the performance (regarding function, not price) of that licensed software—that is, the licensed software cannot function as intended until the seller-licensor cures the alleged infringement defect. Thus, the arrangement qualifies for the scope exception in paragraph [460-10-25-1(b)](https://asc.understandingaccounting.org/asc/460/10/#460-10-25-1). ##### [460-10-55-34](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:51.549Z to 2026-09-10T00:29:51.549Z Record version: sha256:ac5a05661a24c69a15b5e3e764b516f7349bf2fecd162b436d7852cacd68db1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, it would be subject to the disclosure requirements of the [General Subsection](https://asc.understandingaccounting.org/asc/460/10/#50-disclosure) of Section 460-10-50, as well as the disclosure requirements specified in the [Product Warranties Subsection](https://asc.understandingaccounting.org/asc/460/10/#50-disclosure) of that Section. Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:34faf9ac511a32b9f447c775a35f0f873292378f6d8804ba6f93027feea81f66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/460/10/#60-relationships) SEC content: no #### Investments—Equity Method and Joint Ventures ##### [460-10-60-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:e4c90b0ddbc7d0b636fddcc171ba4e6223c8ec15bf17a0028979261f6f01cecd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guaranteed obligations of an investee that is accounted for using the equity method, see paragraph [323-10-35-20](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-20). #### Other Assets and Deferred Costs ##### [460-10-60-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:64869113cde427ec22df04081970e3264d563a4cbe1c1d8d0210726cd412f2fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For contractual guarantees for reimbursement of design and development costs related to long-term supply arrangements, see paragraph [340-10-25-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-3). #### Property, Plant, and Equipment ##### [460-10-60-3](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:24659a2620019636dd0612a0ec656c262dec06b2be7609ccd6e32f8d326dcd44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a seller's guarantee of a return of the buyer's investment in real estate or a seller's guarantee of a return on that investment for an extended period, see Subtopic 842-40 for sale and leaseback transactions. #### Liabilities ##### [460-10-60-4](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:27c37be02534de732717191ee4ec37e3236bb0191cf015844ab03571124fddc3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the guarantee obligation that results if a primary debtor becomes secondarily liable upon a release by a creditor, see paragraph [405-20-40-2](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-2). #### Distinguishing Liabilities from Equity ##### [460-10-60-5](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:d5b8fc29af50a029b7e55acd067f391305f9b64f9c972988bb6104b96c679328 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For an entity's guarantee of the value of an asset, liability, or equity security of another entity that may require or permit settlement in the entity's equity shares, see paragraph [480-10-55-23](https://asc.understandingaccounting.org/asc/480/10/#480-10-55-23). ##### [460-10-60-6](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:db7ebcb58b1225c096a1777eb32a422acec31624b57c4212d22853f79a694b5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a freestanding put option indexed to a subsidiary's equity shares, see paragraphs [480-10-55-53 through 55-58](https://asc.understandingaccounting.org/asc/480/10/#480-10-55-53) . ##### [460-10-60-7](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:ad79c1d94d9d52b34f3501394624b3ea8ffb5fc2f6b895c2d09f76d8625c0458 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For embedded put options indexed to the stock of a consolidated subsidiary, see paragraphs [480-10-55-59 through 55-62](https://asc.understandingaccounting.org/asc/480/10/#480-10-55-59) . ##### [460-10-60-8](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:c6c9fe3685bd3930fcec4cd0599acb4b48d0a5a3c5ba1be9e2a7f1b0f03c57ea 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/). ##### [460-10-60-9](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:d77c4521c0c288f4b1673e856aaad9d7936becad50b707ee815292ba4707d191 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/). ##### [460-10-60-10](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:f16f83e93573f019020cea1f7f2e2c1556093a701db5c45e727c7a58ae0f6fbb 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/). #### Compensation—Stock Compensation ##### [460-10-60-11](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:19224908c79546925971280dd67a719b3c5973160e4dee7bc5f4920118dc6f99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For an employer's guarantee of the debt of an employee stock option plan, see paragraph [718-40-25-9](https://asc.understandingaccounting.org/asc/718/40/#718-40-25-9). #### Business Combinations ##### [460-10-60-12](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:4465d8ba8c8cf5019820a66c1410db93e14ac790a572ee862e78d152ea21cc0c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guarantees that represent contingent consideration in a business combination, see Subtopic 805-30. #### Consolidation ##### [460-10-60-13](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:2d7a0cfe3cc92481d0685fc8a9e68317a495c6175bb10bc3e62e2cce1d350a9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guarantees of the value of the assets or liabilities of a variable interest entity (VIE), written put options on the assets of the VIE, or similar obligations, see paragraphs [810-10-55-25 through 55-26](https://asc.understandingaccounting.org/asc/810/10/#810-10-55-25) . ##### [460-10-60-14](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:858ab7bfe38aa6cf3fed8e6f7e6bf99b624ed1850b11befef86a8ade070d9a82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For freestanding derivative instruments indexed to, and potentially settled in, the stock of a consolidated subsidiary, see paragraphs [815-10-15-77](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-77) and [810-10-45-16A](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-16A). #### Derivatives and Hedging ##### [460-10-60-15](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:2ad38245960b38067ff8bc8e5d13fbbcdff6233a533f382b402d12d637d6f14c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For [weather derivatives](https://asc.understandingaccounting.org/glossary/w/#weather-derivative "A forward-based or option-based contract for which settlement is based on a climatic or geological variable. One example of such a variable is the occurrence or nonoccurrence of a specified amount of snow at a specified location within a specified period of time."), see Subtopic 815-45. #### Leases ##### [460-10-60-16](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:648faadc8691c165799b0978bc58b4879ac6180fa7254b50cabc2ee8bae0b417 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the effect on the [lease term](https://asc.understandingaccounting.org/glossary/l/#lease-term "The noncancellable period for which a lessee has the right to use an underlying asset, together with all of the following: Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option Periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option Periods covered by an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the lessor.") of a provision or condition that in substance is a guarantee of a [lessor's](https://asc.understandingaccounting.org/glossary/l/#lessor "An entity that enters into a contract to provide the right to use an underlying asset for a period of time in exchange for consideration.") debt or a loan to a lessor by the [lessee](https://asc.understandingaccounting.org/glossary/l/#lessee "An entity that enters into a contract to obtain the right to use an underlying asset for a period of time in exchange for consideration.") that is related to the [underlying asset](https://asc.understandingaccounting.org/glossary/u/#underlying-asset "An asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset.") but is structured in such a manner that it does not represent a direct guarantee or loan, see the definition of lease term. ##### [460-10-60-17](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:7f8b68dfd5bd3f98353124181a4a46bbbb6e9a1887a5c363055212bea818b7f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the effects on [lease payments](https://asc.understandingaccounting.org/glossary/l/#lease-payments "See paragraph 842-10-30-5 for what constitutes lease payments from the perspective of a lessee and a lessor.") of a guarantee by the lessee of the lessor's debt, see paragraph [842-10-30-6](https://asc.understandingaccounting.org/asc/842/10/#842-10-30-6). ##### [460-10-60-18](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:e2a24d786bacab28e3932e600ecba339d6466862a1039080800112b6ce10f221 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the effects on [lease payments](https://asc.understandingaccounting.org/glossary/l/#lease-payments "See paragraph 842-10-30-5 for what constitutes lease payments from the perspective of a lessee and a lessor.") of a guarantee by the lessee of the residual value of the underlying asset at the expiration of the lease term, see paragraphs [842-10-30-5](https://asc.understandingaccounting.org/asc/842/10/#842-10-30-5) and [842-10-55-34 through 55-36](https://asc.understandingaccounting.org/asc/842/10/#842-10-55-34) . ##### [460-10-60-19](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:a68742f2bdf8636035c8d2d4c4d767576aff8d8f9c04109a12948e1e1cf22497 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [460-10-60-20](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:eb54c806358c0ed4b2297fd26d50f812a086bf03e9d396df4e9dacc2d751d5dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a determination of whether a residual value guarantee is subject to the requirements of Topic 815, see paragraph [842-10-15-43](https://asc.understandingaccounting.org/asc/842/10/#842-10-15-43). ##### [460-10-60-21](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:854d17098ec42124f6372b198067e145e8dd9a3a01e9efd36794ad0d995b2a11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a commitment by a lessor to guarantee performance of the underlying asset in a manner more extensive than a typical product [warranty](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place.") or to effectively protect the lessee from obsolescence of the underlying asset, see paragraphs [842-10-55-32 through 55-33](https://asc.understandingaccounting.org/asc/842/10/#842-10-55-32) . ##### [460-10-60-22](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:3027cdeed3e40f4e963e5e11cda864200ffb87a79c6a5999a541f2b74878e004 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a manufacturer's guarantee of the resale value of equipment to the purchaser, see paragraphs [842-30-55-1 through 55-15](https://asc.understandingaccounting.org/asc/842/30/#842-30-55-1) . ##### [460-10-60-23](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:e7fe01dc7f63e360b05be1d87eabeb0895129b944698bdea507d1a58df026c2d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a lessee's indemnification for environmental contamination, see paragraph [842-10-55-15](https://asc.understandingaccounting.org/asc/842/10/#842-10-55-15). ##### [460-10-60-24](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:1d2a8d3880f3e8a9ee8dbf324c1be63204d177a61a409060f0fc6dc4692575e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a guarantee by a lessee of the underlying asset's residual value in a lease transaction, see paragraphs [842-10-30-5](https://asc.understandingaccounting.org/asc/842/10/#842-10-30-5) and [842-10-55-34 through 55-36](https://asc.understandingaccounting.org/asc/842/10/#842-10-55-34) . ##### [460-10-60-25](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:89c64ea91588a133a861e2f2ec9c19c5d9fec9ded64b83d1be1a9eee44eaaaa9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [460-10-60-26](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-26) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:7d5cf089316708cad1e5fed9b0053422115228f4b358199bc3ed00a6e77a7850 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [460-10-60-27](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:7d9b1c8165cf5ca72eb6d5a9d8cdb2fc10c51f9cf43f3e353afb95dad90a2fd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [460-10-60-28](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-28) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:dee443c119e7d85c3d7577c9b20b2a733c404154b2de94194d552ee657caca95 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/). ##### [460-10-60-29](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-29) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:41e4b8ddecdc1c1f161f28bec2ca3cb5cda1d50b108cf1d71b2018c8c3651ac1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [460-10-60-30](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-30) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:fee328a39f3ea50dc6c5771d2bab7a6239d0527097897e44ba99ee28e4669a63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [460-10-60-31](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:a1fcb59967d72eee043538bffa1113693f6ec72e6b923c2a974b42f3003edde0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [460-10-60-32](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-32) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:6a81266541bf5d0a3fd8940ed39e66d99ea8ce0864a6c183034e868ca3f70d71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a guarantee by the seller-lessee of the underlying asset's residual value in a sale and leaseback transaction, see paragraphs [842-40-55-20 through 55-21](https://asc.understandingaccounting.org/asc/842/40/#842-40-55-20) . ##### [460-10-60-33](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-33) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:d02556b091e8c7b8141593cf4fc35e9813b229fa7ab0a9e5ceeb7ceedb56686d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) #### Transfers and Servicing ##### [460-10-60-34](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-34) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:40ed5e4bb9a14425ed0e1f2ccb9341303ced472d9da9b2e21263e977e0186bc1 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/). ##### [460-10-60-35](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-35) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:26b478a61d00740b5b76457b5f9d27ef05a35af994ce62b4f45bfb714888cf9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-10](https://asc.understandingaccounting.org/updates/asu-2015-10/). ##### [460-10-60-36](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-36) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:e82124cc2064c63577d195ac4c4786f66f5b4b98786c3b8a427644012b007e9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For transactions that involve the sale of a marketable security to a third-party buyer, with the buyer's having an option to put the security back to the seller at a specified future date or dates for a fixed price, see the guidance beginning in paragraph [860-20-55-20](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-20). ##### [460-10-60-37](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-37) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:2d74dfb8b210f7dd46fc4072b320dd92f2b56a0dfade39184eb18e216db2d937 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a sale of mortgage servicing rights with a subservicing agreement in which the seller-subservicer directly or indirectly guarantees a yield to the buyer, see paragraphs [860-50-40-7 through 40-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-7) . ##### [460-10-60-38](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-38) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:ddc4f68ecb96376b9d928469b21170df18d1ed0379a19c844b248f9918302dfb 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/). #### Plan Accounting—Defined Benefit Pension Plans ##### [460-10-60-39](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-39) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:fa1aabcb9156f9f47d71a6755974ef91d13e126183a3deed57f98eff8491014f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guaranteed investment contracts held by defined benefit pension plans, see paragraph [960-325-35-3](https://asc.understandingaccounting.org/asc/325/960/#325-960-35-3). #### Real Estate—General ##### [460-10-60-40](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-40) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:7fe7a2883e7e5c78fd90e10e8082638ddbfe6c2e810b3246ec6015fa7c651a91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For an entity's agreement to either make up shortfalls in the annual debt service requirements or guarantee a tax increment financing entity's debt, see paragraph [970-470-25-3](https://asc.understandingaccounting.org/asc/470/970/#470-970-25-3). ### Product Warranties #### Revenue Recognition ##### [460-10-60-41](https://asc.understandingaccounting.org/asc/460/10/#460-10-60-41) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:54.564Z to 2026-09-10T00:29:54.564Z Record version: sha256:2b94ff4e4231ad55151bf9e4503b901841e037fa8139ae6858cfb44cfe667698 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For recognition 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.") for a [warranty](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place.") that is identified as a separate [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."), see paragraphs [606-10-55-30 through 55-35](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-30) . Source downloaded (UTC): 2026-09-10T00:29:59.092Z to 2026-09-10T00:29:59.092Z Record version: sha256:a721c0c4fa5cef0666bdf10ae7aa16ee4b332b89f640568a4cf35fb73976a3f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/460/10/#sec-00-status) SEC content: yes ##### [460-10-S00-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:59.092Z to 2026-09-10T00:29:59.092Z Record version: sha256:406087a586c3ee8cfe5a44dcafce218389532c7bd2d77b51279526d676d3c063 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
460-10-S50-1AddedAccounting Standards Update No. 2020-0910/22/2020
460-10-S50-2AddedAccounting Standards Update No. 2020-0910/22/2020
Source downloaded (UTC): 2026-09-10T00:30:02.138Z to 2026-09-10T00:30:02.138Z Record version: sha256:ad9c6d9729bf5f6d7256f1d738d45d993e9048330a245800dc046e0bf0543cc9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-10-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/460/10/#sec-50-disclosure) SEC content: yes #### Guarantors and Issuers of Guaranteed Securities Registered or Being Registered ##### [460-10-S50-1](https://asc.understandingaccounting.org/asc/460/10/#460-10-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:02.138Z to 2026-09-10T00:30:02.138Z Record version: sha256:b0b54c9409de686e7633945706dc59cb0f79b7ef794c72beccd008579c76652d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [470-10-S99-1](https://asc.understandingaccounting.org/asc/470/10/#470-10-S99-1), Regulation S-X Rule 3-10 for requirements applicable to financial statements of guarantors and issuers of guaranteed securities registered or being registered. ##### [460-10-S50-2](https://asc.understandingaccounting.org/asc/460/10/#460-10-S50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:02.138Z to 2026-09-10T00:30:02.138Z Record version: sha256:00a43643048719ca0e1d5d6dd9b959b685a7ecd804788c52842ccff6b85eeeec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [470-10-S99-1A](https://asc.understandingaccounting.org/asc/470/10/#470-10-S99-1A), Regulation S-X Rule 13-01 for disclosure requirements about guarantors and issuers of guaranteed securities registered or being registered. Source downloaded (UTC): 2026-09-10T00:30:04.732Z to 2026-09-10T00:30:11.673Z Record version: sha256:968130fd4dee20644a84d6441737750133a0600d4c8818a5cbee8d9b9f273c85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-954: Guarantees — Health Care Entities ### Machine-generated study aids ```json { "summary": "This subtopic applies the general guarantee accounting model in Topic 460 to health care entities, following the scope of Subtopic 954-10. Its only substantive content points to Topic 460's guidance on minimum revenue guarantees, illustrated by a health care entity's guarantee of minimum revenue to a recruited physician.", "key_points": [ "This Subtopic provides guidance on accounting for guarantees for health care entities within the scope of Topic 460 (460-954-05-1).", "Scope and scope exceptions are the same as those in the Overall Subtopic at Section 954-10-15 (460-954-15-1).", "Guidance on minimum revenue guarantees is found in Topic 460 generally (460-954-55-1).", "Paragraph 460-10-55-11 illustrates a minimum revenue guarantee granted by a not-for-profit, business-oriented health care entity to a nonemployee physician recruited to move to the entity's geographic area to establish a practice (460-954-55-1)." ], "categories": [ "Contingencies and guarantees", "Industry-specific", "Recognition", "Not-for-profit" ], "audience_level": "intermediate", "student_note": "Physician recruitment income guarantees are a classic health care industry exam fact pattern: they are guarantees under Topic 460, so the entity recognizes a liability at inception at fair value, not merely a contingency accrued when payment becomes probable. The common error is treating the recruitment agreement as a compensation or contingency issue rather than a guarantee.", "related_topics": [ "460-10", "954-10", "954-450", "450-20", "954-440" ], "key_concepts": [ "guarantee", "minimum revenue guarantee", "physician recruitment agreement", "health care entity", "not-for-profit business-oriented entity", "guarantor liability", "scope" ] } ``` Source downloaded (UTC): 2026-09-10T00:30:04.732Z to 2026-09-10T00:30:04.732Z Record version: sha256:56ed6d047d55f797956a80c1ab8522359d45aa309e4ec71525817d2fa282e7f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-954-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/460/954/#05-overview-and-background) SEC content: no ##### [460-954-05-1](https://asc.understandingaccounting.org/asc/460/954/#460-954-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:04.732Z to 2026-09-10T00:30:04.732Z Record version: sha256:b542eb507cc58005bd191ca4d2b8d3f45e5cc16153a43bda84ad9830e24aa06b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on accounting for guarantees for health care entities within the scope of this Topic. Source downloaded (UTC): 2026-09-10T00:30:08.398Z to 2026-09-10T00:30:08.398Z Record version: sha256:3e2227108db2b5b5bfa1a36440cbc4b679118a36ea610b4115108bac1efbbcf8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-954-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/460/954/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [460-954-15-1](https://asc.understandingaccounting.org/asc/460/954/#460-954-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:08.398Z to 2026-09-10T00:30:08.398Z Record version: sha256:a533c185a46cc2872ce6e293a002f476f16cab4e5fc6fffa0f684d48f0556bd5 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 954-10-15. Source downloaded (UTC): 2026-09-10T00:30:11.673Z to 2026-09-10T00:30:11.673Z Record version: sha256:88e2064d3e6f35d32b8447bcc62c48861d9b1873492a73868768b1efeb87f3f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 460-954-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/460/954/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [460-954-55-1](https://asc.understandingaccounting.org/asc/460/954/#460-954-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:11.673Z to 2026-09-10T00:30:11.673Z Record version: sha256:cb6e9ec6ccc175b325547f272ef41d46e376f061db3ac7e19175e9bd38422f19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Topic 460 for guidance on minimum revenue guarantees, and see paragraph [460-10-55-11](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-11) for an example of a minimum revenue guarantee granted to a nonemployee physician by a not-for-profit business-oriented health care entity that has recruited a physician to move to the entity's geographical area to establish a practice.