Chapter 11 - Solution Manual

Recently issued external credit ratings or current

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recently issued external credit ratings or current internal groupings used by the guarantor to manage its risk) 5. If the entity uses internal groupings for purposes of item (a)(4), how those groupings are determined and used for managing risk. b. All of the following information about the maximum potential amount of future payments under : 1. The maximum potential amount of future payments (undiscounted) that the guarantor could be required to make under the guarantee, which shall not be reduced by the effect of any amounts that may possibly be recovered under recourse or collateralization provisions in the guarantee (which are addressed under (d) and (e)) 2. If the terms of the guarantee provide for no limitation to the maximum potential future payments under the guarantee, that fact 3. If the guarantor is unable to develop an estimate of the maximum potential amount of future payments under its guarantee, the reasons why it cannot estimate the maximum potential amount. c. The current carrying amount of the liability, if any, for the guarantor’s obligations under the guarantee (including the amount, if any, recognized under Section 450-20-30), regardless of whether the guarantee is freestanding or embedded in another contract d. The nature of any recourse provisions that would enable the guarantor to recover from third parties any of the amounts paid under the guarantee e. The nature of any assets held either as collateral or by third parties that, upon the occurrence of any triggering event or condition under the guarantee, the guarantor can obtain and liquidate to recover all or a portion of the amounts paid under the guarantee f. If estimable, the approximate extent to which the proceeds from liquidation of assets held either as collateral or by third parties would be expected to cover the maximum potential amount of future payments under the guarantee. See the Product Warranties Subsection of Section 460–10–50 for an exception to the requirements of (b). > Effect of the Guarantee Disclosure Requirements on the Disclosure Requirements of Other Topics 460-10-50-5 The disclosures required by this Subsection do not eliminate or affect the following disclosure requirements: a. The requirements in the General Subsection of Section 825–10–50 that certain entities disclose the fair value of their financial guarantees issued
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231 b. The requirements in paragraphs 450-20-50-3 through 50-4 that an entity disclose a contingent loss that has a reasonable possibility of occurring c. The requirements in the Disclosure Sections of Topic 815, which apply to guarantees that are accounted for as derivatives d. The requirements in Section 275-10-50 that an entity disclose information about risks and uncertainties that could significantly affect the amounts reported in the financial statements in the near term. See Example 1 (paragraph 460-10-55-25) for an illustration of the required disclosure.
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