concentrations and severe impact

Presentation2

1. 275-10Overall275 Risks and Uncertainties

   ASC 275-10 requires all entities to disclose, in the basic financial statements, information about risks and uncertainties existing at the balance sheet date in four areas: nature of operations (or, if principal operations have not commenced, current activities), the pervasive use of management estimates, certain significant estimates, and current vulnerability due to certain concentrations (275-10-50-1). The hallmark of the Subtopic is selectivity — disclosure is triggered only when specified screening criteria are met, generally when it is at least reasonably possible that a change or severe impact will occur in the near term and the effect would be material or severe (275-10-50-8; 275-10-50-16). It excludes risks from management/key personnel, proposed regulatory or accounting changes, internal control deficiencies, and acts of God, war, or sudden catastrophes (275-10-15-4).

2. 275-912Contractors—Federal Government275 Risks and Uncertainties

   This Subtopic requires federal government contractors to make incremental disclosures about the risks and uncertainties arising from the government's unilateral right to terminate contracts for its convenience. The effect of a termination is reflected in the period the termination occurs (or earlier if it is a subsequent event attributable to balance-sheet-date conditions), with only the reasonably estimable portions of a termination claim recognized and the remainder disclosed. Controversial or undeterminable claim elements are stated at amounts estimated to be collectible or excluded and disclosed.