Accounting for Contingencies (Portfolio 5165)

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Accounting for Contingencies examines accounting for contingencies under both U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS). This Portfolio also distinguishes contingencies from other similar items not properly accounted for as contingencies.
Accounting for Contingencies includes reporting of potential losses from litigation in process, environmental damage, and expenses related to uncollectible accounts receivable and product warranty costs. The primary source accounting rules for contingencies under U.S. GAAP is FASB Statement No. 5, Accounting for Contingencies (FAS 5), which is principally codified in FASB Accounting Standards Codification Topic 450 (ASC). Its principal international counterpart is IASC International Accounting Standard 37, Provisions, Contingent Liabilities and Contingent Assets (IAS 37).