Guarantees and contingencies do not necessarily need to be accrued, but they may have to be disclosed in certain instances.

Question

Quizplus · Accepted Answer

Guarantees and contingencies may not always require accrual if the probability of occurrence and amount of loss can't be reasonably estimated. But, they should be disclosed in the financial statements with appropriate notes for the users of the financial statements to understand the potential impact.

Guarantees and Contingencies Do Not Necessarily Need to Be Accrued