Get Gov/pdffiles/handbooksffas5

SFFAS No. 5 states that a contingent liability should be recognized when a past event or exchange transaction has occurred; a future outflow or other sacrifice of resources is probable; and the future outflow or sacrifice of resources is measurable.

FAS 5, or Financial Accounting Standards No. 5, Accounting for Contingencies, was the original FASB pronouncement superseded by FASB Accounting Standards Codification (ASC) subtopic 450-20, Contingencies: Loss Contingencies.

The objective of AS 5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies, is to prescribe the classification and disclosure of certain items in the statement of profit and loss so that all enterprises prepare and present such a statement on a uniform basis.

The FASAB Handbook of Accounting Standards and Other Pronouncements, as Amended (Current Handbook)—an approximate 2,500-page PDF—is the most up-to-date, authoritative source of generally accepted accounting principles (GAAP) developed for federal entities.

Reasonably possible. The chance of the future event or events occurring is more than remote but less than likely.

This Statement sets forth recognition criteria and guidance on what information should be incorporated into financial statements and when. Recognition is the process of formally incorporating an item in the financial statements of an entity as an asset, liability, revenue, expense, or the like.

This Statement establishes standards of financial accounting and reporting for loss contingencies.

SFAC No. 5, "Recognition and Measurement in Financial Statements of Business Enterprises," sets forth fundamental recognition and measurement criteria and guidance on what information should be formally incorporated into financial statements and when.