Amber Inc. is one of the largest pharmacy retailers in mid-America. In its 2018 annual report to shareholders, it made the following disclosure:
In 2013, Amber assigned a number of leases to Bell's Inc. and Home Stores, Inc., as part of the sale of the Company's former Eastern divisions. Amber is contingently liable if Bell's and Home are unable to continue making rental payments on these leases. In 2017, Amber recorded a pretax charge to earnings of $42.7 million to recognize the estimated lease liabilities associated with the Bell's and Home bankruptcies and for a single lease from Amber's former Georgia division. In 2018, Bell's began the liquidation process and Home emerged from bankruptcy and, based on the resolution of various leases, Amber reversed $12.1 million of this accrual.
Explain the accounting principle(s) that required Amber to record the $42.7 million charge in 2017 and the $12.1 million reversal in 2018.

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The Answer of Amber Inc. is one of the largest pharmacy retailers in mid-America. In its 2018 annual report to shareholders, it made the following disclosure:
In 2013, Amber assigned a number of leases to Bell's Inc. and Home Stores, Inc., as part of the sale of the Company's former Eastern divisions. Amber is contingently liable if Bell's and Home are unable to continue making rental payments on these leases. In 2017, Amber recorded a pretax charge to earnings of $42.7 million to recognize the estimated lease liabilities associated with the Bell's and Home bankruptcies and for a single lease from Amber's former Georgia division. In 2018, Bell's began the liquidation process and Home emerged from bankruptcy and, based on the resolution of various leases, Amber reversed $12.1 million of this accrual.
Explain the accounting principle(s) that required Amber to record the $42.7 million charge in 2017 and the $12.1 million reversal in 2018.

Amber Inc Is One of the Largest Pharmacy Retailers in Mid-America