Wiley GAAP 2015: Interpretation and Application of Generally Accepted Accounting Principles 2015

Chapter 15ASC 275 RISKS AND UNCERTAINTIES

PERSPECTIVE AND ISSUES

   Subtopic

   Scope and Scope Exceptions

DEFINITIONS OF TERMS

CONCEPTS, RULES, AND EXAMPLES

   Nature of Operations

   Use of Estimates in the Preparation of Financial Statements

   Certain Significant Estimates

   Current Vulnerability Due to Concentrations

   Example Disclosure – Geographic Concentration

   Other Sources

PERSPECTIVE AND ISSUES

Subtopic

ASU 275, Risks and Uncertainties, contains one subtopic:

• ASU 275-10, Overall, that provides guidance on disclosures of risks and uncertainties inherent in entity's operations.

This topic recognizes that all businesses face risk and uncertainty. The objective of ASC 275 is to provide guidelines that will enable the preparer to screen the many risks and uncertainties faced by entities and focus on those most useful to the readers of the particular entity's report, those that will enable the readers to assess the future cash flows and result of operations. Thus, the topic focuses on screening criteria for risks and uncertainties and the resulting required disclosures.

Scope and Scope Exceptions

The guidance applies to all GAAP financial statements, interim and annual, but not to condensed or summarized financial statements. The guidance does not apply to risks and uncertainties associated with:

• “Management or key personnel
• Proposed changes in accounting principles
• Deficiencies in the internal control structure
• The possible effects of acts of God, war, or sudden ...