Contingency range measurement

Range measurement begins only after the general recognition gates are met. A probable loss with a reasonable range is estimable even when the evidence does not support one exact outcome.

Select the supported amount

ASC 450-20-25-5 confirms that a reasonable range can satisfy the estimation condition. ASC 450-20-30-1 then supplies the measurement rule. Accrue a better estimate within the range when one amount is better supported than the others. Use the minimum only when no amount is a better estimate.

Do not select the minimum because it seems conservative. Do not select the midpoint merely because the endpoints are known. A midpoint requires evidence about the outcomes; two endpoints alone do not provide a probability distribution.

Suppose a probable loss has a supported range from $180,000 to $420,000. If no amount is a better estimate, accrue $180,000. Preserve the remaining $240,000 as additional exposure for disclosure analysis. If the evidence instead supports $300,000 as the better estimate, accrue $300,000. The range stayed the same, but the evidence changed.

Reconcile measurement and exposure

Show the recognized amount, low and high endpoints, reason for selecting the amount, and high end less the accrual. Do not call the difference an expected loss. It is a control amount that keeps the unrecognized part of the supported range visible.

The range lesson explains both measurement branches. The Cedar Trail example connects the amount to the entry and note support. The independent range task checks a different range, while the disclosure task checks the $180,000 case.

This page does not establish that a loss is probable or that the endpoints are reasonable. Those conclusions must already be supported.