What it is
ASC 450 sets the framework for loss contingencies: accrue when a loss is probable and the amount can be reasonably estimated, disclose when a loss is reasonably possible, and disclose a probable loss that is not accrued. This log applies it matter by matter and totals the result.
Each row takes the likelihood, whether the loss is estimable, the range and a best estimate. The log computes the accrual, the reasonably possible exposure above it and the disclosure treatment, and flags matters with a missing legal letter or an inconsistent range. The Summary tab produces the true-up entry.
When to use it
- At each reporting date for litigation, claims, regulatory matters, guarantees and environmental items.
- During the audit, to support management’s assessment and the legal letter responses.
- When preparing the contingencies note and the amount of reasonably possible loss to disclose.
What’s inside
- Log of 25 matters with nature, likelihood, estimability, range and best estimate
- Calculated accrual and reasonably possible loss in excess of the accrual
- Treatment by matter: accrue, disclose, or no action
- Review flags for ranges, best estimates and outstanding legal letters
- Summary with counts, totals and the true-up journal entry
Standard cited
This template follows ASC 450. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
What amount is accrued when only a range is available?
If some amount in the range is a better estimate than any other, accrue that amount. If no amount is better, accrue the low end of the range and disclose the exposure up to the high end.
Are gain contingencies recognized?
No. A gain contingency is not recognized before realization. Keep them off this log and disclose them carefully when disclosure is warranted.
Does a remote loss need disclosure?
Generally no. Guarantees and similar items can call for disclosure even when the likelihood of loss is remote, so review those against the guarantee guidance.
Who decides the likelihood?
Management, with counsel’s input. The log records the conclusion and the evidence date. It does not set the likelihood.
Related templates
- Attorney Legal Letter Inquiry (AU-C 501 / ASC 450)
- Subsequent Events Checklist and Memo (AU-C 560 / ASC 855)
- Disclosure Checklist: Subsequent Events (ASC 855)
- Loss Contingency Memo (ASC 450)
Last updated 11/05/2026. All free templates.