AlTi Global, Inc.

Previous wording

AlTi is a global wealth and investment partner to families, foundations and institutions, helping clients activate capital with clarity, bring structure to complexity, and plan with purpose across borders and generations. AlTi combines the breadth of a global firm with the service offering of a family office to deliver solutions designed to meet the full complexity of wealth and capital. We manage or advise approximately $90.1 billion in combined assets as of March 31, 2026. We have approximately 490 professionals operating in 19 cities in 9 countries across three continents as of March 31, 2026. We provide holistic solutions for our UHNW and institutional clients through an array of services, including discretionary investment management services, non-discretionary investment advisory services, estate and wealth planning, trust and fiduciary, governance and education, philanthropy and purposeful giving, and family office services. We also provide our clients with access to alternative investment opportunities, including investments in strategies and asset classes to which they would otherwise likely not be able to gain exposure.

Current wording

AlTi is a global wealth and investment partner to families, foundations and institutions, helping clients activate capital with clarity, bring structure to complexity, and plan with purpose across borders and generations. AlTi combines the breadth of a global firm with the service offering of a family office to deliver solutions designed to meet the full complexity of wealth and capital. We manage or advise approximately $96.0 billion in combined assets as of June 30, 2026. We have approximately 465 professionals operating in 19 cities in nine countries across three continents as of June 30, 2026. We provide holistic solutions for our UHNW and institutional clients through an array of services, including discretionary investment management services, non-discretionary investment advisory services, estate and wealth planning, trust and fiduciary, governance and education, philanthropy and purposeful giving, and family office services. We also provide our clients with access to alternative investment opportunities, including investments in strategies and asset classes to which they would otherwise likely not be able to gain exposure.

Previous wording

Separately, we have one internally managed fund and stakes in three Externally-Managed Funds in our alternatives platform, with a largely institutional client base.

Current wording

Separately, we have one internally managed fund and stakes in three Externally-Managed Funds in our alternatives platform, with a largely institutional client base. These are subject to the same due diligence, governance and suitability rules as third-party investment solutions.

Previous wording

Our internally managed TIG Arbitrage fund is entitled to receive incentive fees from the assets it manages if certain performance returns have been achieved. These incentive fees range from 15% to 20% of net profits. In compliance with ASC 606, we recognize these fees only when it is probable that a significant revenue reversal will not occur. Our incentive fees are not subject to clawback provisions.

Current wording

Our internally managed TIG Arbitrage fund, part of our alternatives platform with a largely institutional client base, is entitled to receive incentive fees from the assets it manages if certain performance returns have been achieved. These incentive fees range from 15% to 20% of net profits. In compliance with ASC 606, we recognize these fees only when it is probable that a significant revenue reversal will not occur. Our incentive fees are not subject to clawback provisions.

Previous wording

Wealth and institutional clients in certain jurisdictions may also pay performance or incentive fees if their portfolio achieves returns in excess of an agreed benchmark or hurdle rate. Typically, such fees are paid annually upon crystallization and are not accrued prior to being earned.

Current wording

Wealth and institutional clients in certain jurisdictions may pay performance or incentive fees if their portfolio achieves returns in excess of an agreed benchmark or hurdle rate. Typically, such fees are paid annually upon crystallization and are not accrued prior to being earned.

Previous wording

Distributions from investments are generated from the equity interests we have in three external managers. Distributions from each external manager are recorded upon receipt of the distribution. These distributions are generated through our equity interest in the external manager’s management fees and incentive fees. The management fee component of the distributions is recurring in nature, while the incentive portion, which is performance based, is more susceptible to impact from exogenous factors. Our economic interests in the External Strategic Managers are as follows:

Current wording

Distributions from investments are generated from the equity interests we have in three external managers, as part of our alternatives platform with a largely institutional client base. Distributions from each external manager are recorded upon receipt of the distribution. These distributions are generated through our equity interest in the external manager’s management fees and incentive fees. The management fee component of the distributions is recurring in nature, while the incentive portion, which is performance based, is more susceptible to impact from exogenous factors. Our economic interests in the External Strategic Managers are as follows:

Previous wording

Our operations are also affected by movements in interest rates, which influence the value of our clients’ portfolios and, in turn, our revenue. Following three quarter‑point rate reductions in late 2025, the Federal Reserve held the federal funds rate steady at a target range of 3.50%–3.75% at both its January and March 2026 meetings. Policymakers emphasized a data‑dependent stance, citing heightened inflation uncertainty and geopolitical risks, and signaled a willingness to remain on hold until there is greater clarity on the trajectory of inflation and economic growth.

Current wording

Our operations are also affected by movements in interest rates, which influence the value of our clients’ portfolios and, in turn, our revenue. Following three quarter‑point rate reductions in late 2025, the Federal Reserve held the federal funds rate steady at a target range of 3.50%–3.75% at each of its meetings in the first half of 2026. Policymakers in June 2026 continued to emphasize their commitment to returning inflation to the Federal Reserve’s long-term target, noting that productivity growth and business investment were strong, and economic expansion continued despite elevated uncertainty that it attributed in part to geopolitical tensions.

Previous wording

We continue to monitor developments related to these macroeconomic factors and assess their potential impact on both financial markets and our business. A slowdown in inflows or sustained market declines could negatively affect our future results, potentially leading to reduced management fees. At this time, the full impact of these events on financial markets, the broader economy, and our financial statements remains uncertain. For more information, please refer to Part I, Item 1A. “Risk Factors” of our Annual Report for previously disclosed risk factors.

Current wording

We continue to monitor developments related to these macroeconomic factors and assess their potential impact on both financial markets and our business. As with all businesses of this nature, a slowdown in inflows or sustained market declines could negatively affect our future results, potentially leading to reduced management fees. At this time, the full impact of these events on financial markets, the broader economy, and our financial statements remains uncertain. For more information, please refer to Part I, Item 1A. “Risk Factors” of our Annual Report for previously disclosed risk factors.

Previous wording

Within the Alternatives platform, assets consist of assets managed by TIG Arbitrage (AUM $1.8 billion and $1.8 billion as of March 31, 2026 and December 31, 2025, respectively), and the External Strategic Managers (AUA $5.3 billion and $5.5 billion as of March 31, 2026 and December 31, 2025, respectively).

Current wording

Within the Alternatives platform, assets consist of assets managed by TIG Arbitrage (AUM $1.8 billion and $1.8 billion as of June 30, 2026 and December 31, 2025, respectively), and the External Strategic Managers (AUA $5.4 billion and $5.5 billion as of June 30, 2026 and December 31, 2025, respectively).

Previous wording

The tables below present the change in our total AUM/AUA by strategy and product for our alternatives platform for the three months ended March 31, 2026 and March 31, 2025:

Current wording

The tables below present the change in our total AUM/AUA by strategy and product for our alternatives platform for the three and six months ended June 30, 2026 and June 30, 2025:

Previous wording

Components of Consolidated Results of Income

Current wording

Components of Consolidated Results of Operations

Previous wording

Management / advisory fees. Management and advisory fees for the three months ended March 31, 2026, increased by $7.1 million compared to the three months ended March 31, 2025. This increase was driven by higher fees due to increases in our AUM largely attributable to our acquisition of Kontora in Q2 of 2025 and strong portfolio performance. These gains were partially offset by lower management fees in the TIG Arbitrage strategy due to fund outflows.

Current wording

Management / advisory fees. Management and advisory fees for the three months ended June 30, 2026, increased by $5.2 million compared to the three months ended June 30, 2025. This increase was driven by higher fees due to increases in our AUM largely attributable to our acquisition of Kontora in the second quarter of 2025, positive net client flows, and strong portfolio performance.

Previous wording

Incentive fees. For the three months ended March 31, 2026, incentive fees decreased by $0.2 million compared to the three months ended March 31, 2025. This decrease is attributable to less fund redemptions resulting in lower crystallized incentive fees in the TIG Arbitrage strategy for the current year as well as fee true-ups occurring in the first quarter, which led to lower crystallized incentive fees in the current period.

Current wording

Incentive fees. For the three months ended June 30, 2026, incentive fees decreased by $0.4 million compared to the three months ended June 30, 2025. This decrease is attributable to less fund redemptions resulting in lower crystallized incentive fees in the TIG Arbitrage strategy for the current year as well as fee true-ups occurring in the first quarter, which led to lower crystallized incentive fees in the current period.

Previous wording

Distributions from investments. Distributions from investments for the three months ended March 31, 2026 increased by $9.1 million compared to the three months ended March 31, 2025. This increase was primarily due to higher distributions related to incentive fees in the European Equities strategy and partially offset by lower distributions from the Real Estate Bridge Lending Strategy and Asian Credit and Special Situations strategies.

Current wording

Distributions from investments. Distributions from investments for the three months ended June 30, 2026 increased by $0.8 million compared to the three months ended June 30, 2025. This increase was primarily due to higher distributions related to management fees in the European Equities strategy and the Real Estate Bridge Lending Strategy.

Previous wording

Other fees / income. Other fees and income for the three months ended March 31, 2026 was relatively flat compared to the three months ended March 31, 2025 with a slight increase of $25.0 thousand related to higher fees related to one-off arrangements.

Current wording

Other fees / income. Other fees and income for the three months ended June 30, 2026 was relatively flat compared to the three months ended June 30, 2025 with a slight increase of $0.1 million related to higher fees related to one-off arrangements.

Previous wording

The Company’s effective tax rate was (0.5)% for the three months ended March 31, 2026 compared to 35.9% for three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2025 differed from the statutory U.S. corporate tax rate primarily due to the tax impact of mark-to-market losses associated with contingent liabilities, equity consideration in the Business Combination, and nondeductible professional fees incurred in connection with the Business Combination. The effective tax rate for the three months ended March 31, 2026 differed from the statutory U.S. corporate tax rate primarily due to the portion of income allocated to noncontrolling interest, state and local taxes, and the impact of a full valuation allowance on many of the Company’s deferred tax assets, including those generated at the Company, in certain of the Company’s U.S. and non-U.S. subsidiaries and its investment in Umbrella.

Current wording

The Company’s effective tax rate was 0.2% for the three months ended June 30, 2026 compared to 15.4% for three months ended June 30, 2025. The effective tax rate for the three months ended June 30, 2026 differed from the statutory U.S. corporate tax rate primarily due to the portion of income allocated to noncontrolling interest, state and local taxes, and the impact of a full valuation allowance on many of the Company’s deferred tax assets, including those generated at the Company, in certain of the Company’s U.S. and non-U.S. subsidiaries and its investment in Umbrella. The effective tax rate for the three months ended June 30, 2025 differed from the statutory U.S. corporate tax rate primarily due to the tax impact of mark-to-market losses associated with contingent liabilities, equity consideration in the Business Combination, and nondeductible professional fees incurred in connection with the Business Combination.

Previous wording

Compensation expense. Compensation expense for the three months ended March 31, 2026 increased by $15.9 million compared to the three months ended March 31, 2025. This increase was primarily due to higher compensation costs tied to acquisition driven compensation and benefits, acquisition-related earn-outs, new equity grants, management restructuring expenses, and organizational streamlining initiatives that continue to be undertaken in 2026.

Current wording

Compensation expense. Compensation expense for the six months ended June 30, 2026 increased by $13.7 million compared to the six months ended June 30, 2025. This increase was primarily due to higher compensation costs tied to acquisition-driven compensation and benefits, acquisition-related earn-outs, new equity grants, and management restructuring expenses.

Previous wording

Non-compensation expense. Non-compensation expenses for the three months ended March 31, 2026 increased by $2.4 million as compared to the three months ended March 31, 2025, primarily driven by a $3.3 million increase in general, administrative and other costs primarily due to negative FX adjustments, higher directors’ fees, and other miscellaneous expenses. This was partially offset by lower bad debt expenses when compared to the prior year.

Current wording

Non-compensation expense. Non-compensation expenses for the six months ended June 30, 2026 decreased by $4.5 million as compared to the six months ended June 30, 2025, primarily driven by a $6.2 million decrease in one-time and transactional professional fees, a $1.3 million decrease in systems, technology, and telephone expenses as a result of a review of service providers resulting in rationalization, and a $0.9 million decrease in occupancy costs as a result of us decreasing the size of our real estate footprint. This was partially offset by a $3.0 million increase in general, administrative and other costs primarily due to negative foreign exchange adjustments, higher directors’ fees, and other miscellaneous expenses.

Previous wording

On March 19, 2026, the Company and certain of its affiliates on the one hand and the International Real Estate Businesses and the Administrators on the other hand entered into a binding settlement and intercompany loan deed memorializing the terms of the settlement. The settlement amount of £11.2 million ($15.0 million) is noninterest bearing and paid in installments through November 2027. As of March 31, 2026, the outstanding balance of the settlement was $14.5 million.

Current wording

On March 19, 2026, the Company and certain of its affiliates on the one hand and the International Real Estate Businesses and the Administrators on the other hand entered into a binding settlement and intercompany loan deed memorializing the terms of the settlement. The settlement amount of £11.2 million ($15.0 million) is noninterest bearing and paid in installments through November 2027. As of June 30, 2026, the outstanding balance of the settlement was $12.3 million.

Previous wording

On April 30, 2025, the Company acquired Kontora. See Note 4 (Business Combinations) in our accompanying condensed consolidated financial statements. Kontora has a term loan with HypoVereinsbank. Throughout the period of the term loan Kontora Family Office GmbH, as a standalone entity, is required to maintain economic equity of the higher of $1.8 million or 30% of the total assets of this standalone entity. At March 31, 2026, the term loan had an outstanding principal amount of $0.4 million. In addition, Kontora has a revolving line of credit, with an aggregate borrowing facility of $0.9 million with HypoVereinsbank, which expires on July 25,

Current wording

On April 30, 2025, the Company acquired Kontora. See Note 4 (Business Combinations) in our accompanying condensed consolidated financial statements. Kontora has a term loan with HypoVereinsbank. Throughout the period of the term loan Kontora Family Office GmbH, as a standalone entity, is required to maintain economic equity of the higher of $1.8 million or 30% of the total assets of this standalone entity. At June 30, 2026, the term loan had an outstanding principal amount of $0.3 million. In addition, Kontora has a revolving line of credit, with an aggregate borrowing facility of $0.9 million with HypoVereinsbank, which expires on July 25, 2029. The funded amounts under this revolving line of credit bear no restrictions on its use. At June 30, 2026, there was $0.4 million outstanding borrowings under the revolving line of credit.

Previous wording

Cash and cash equivalents decreased by $1.4 million during the three months ended March 31, 2026 primarily due to the Company’s net financing activities during the period, partially offset by the Company’s net operating activities during the period.

Current wording

Cash and cash equivalents decreased by $10.0 million during the six months ended June 30, 2026 primarily due to the Company’s net financing activities during the period, partially offset by the Company’s net operating activities during the period.

Previous wording

Our cash inflows from operating activities are comprised of cash collected through management and advisory fees, incentive fees, distributions from investments, and other income/fees. Cash outflows primarily include operating expenses, with the most significant components being compensation and benefits and professional fees. Our net operating cash inflow of $5.3 million for the three months ended March 31, 2026, was primarily driven by a decrease in Fees receivable of $31.1 million and partially offset by a decrease in Accrued compensation and profit sharing of $25.6 million.

Current wording

Our cash inflows from operating activities are comprised of cash collected through management and advisory fees, incentive fees, distributions from investments, and other income/fees. Cash outflows primarily include operating expenses, with the most significant components being compensation and benefits and professional fees. Our net operating cash inflow of $2.9 million for the six months ended June 30, 2026, was primarily driven by a decrease in Fees receivable of $29.7 million resulting from fee collections and offset by a decrease in Accrued compensation and profit sharing of $28.3 million resulting from payments to employees.

Previous wording

Our net operating cash outflow of $30.4 million for the three months ended March 31, 2025, was primarily driven by the Company’s net operating loss from continuing operations for the period, as operating expenses exceeded revenues, as well as a decrease in Accrued compensation and profit sharing of $22.7 million.

Current wording

Our net operating cash outflow of $50.6 million for the six months ended June 30, 2025, was primarily driven by the Company’s net operating loss from continuing operations for the period, as operating expenses exceeded revenues, as well as a decrease in Accrued compensation and profit sharing of $21.2 million.

Previous wording

There was no movement in cash provided by or used by investing activities during the three months ended March 31, 2026.

Current wording

There was an immaterial movement in cash provided by or used in investing activities during the six months ended June 30, 2026.

Previous wording

Net cash provided by investing activities of $19.8 million during the three months ended March 31, 2025, was driven primarily by the proceeds received of $20.4 million from the sale of an equity method investment.

Current wording

Net cash provided by investing activities of $13.2 million during the six months ended June 30, 2025, was driven primarily by the proceeds received of $20.4 million from the sale of an equity method investment. This was partially offset by the acquisition of Kontora in the second quarter of 2025.

Previous wording

As of March 31, 2026 and December 31, 2025, the liability associated with the TRA was approximately $30.6 million and $25.7 million, respectively. Payments under the TRA that are on account of liabilities arising in connection with the Business Combination will be revalued at the end of each reporting period with the gain or loss recognized in earnings. As of March 31, 2026 and December 31, 2025, the Company carried $8.6 million and $8.8 million, respectively, of its TRA liability at fair value, as it is contingent consideration from the Business Combination. The remaining portion of the TRA liability is carried at a value equal to the expected future payments under the TRA.

Current wording

As of June 30, 2026 and December 31, 2025, the liability associated with the TRA was approximately $30.3 million and $25.7 million, respectively. Payments under the TRA that are on account of liabilities arising in connection with the Business Combination will be revalued at the end of each reporting period with the gain or loss recognized in earnings. As of June 30, 2026 and December 31, 2025, the Company carried $8.4 million and $8.8 million, respectively, of its TRA liability at fair value, as it is contingent consideration from the Business Combination. The remaining portion of the TRA liability is carried at a value equal to the expected future payments under the TRA.

Previous wording

As of March 31, 2026, assuming no material changes in the relevant tax laws and that the Company generates sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain of AlTi’s assets, we expect to pay approximately $30.6 million under the TRA. Future changes in the fair value of the TRA liability will be recognized in earnings. Any future cash savings and related payments under the TRA due to subsequent exchanges of Class B Paired Interests for shares of Class A Common Stock would be accounted for separately from the amount related to the Business Combination.

Current wording

As of June 30, 2026, assuming no material changes in the relevant tax laws and that the Company generates sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain of AlTi’s assets, we expect to pay approximately $30.3 million under the TRA. Future changes in the fair value of the TRA liability will be recognized in earnings. Any future cash savings and related payments under the TRA due to subsequent exchanges of Class B Paired Interests for shares of Class A Common Stock would be accounted for separately from the amount related to the Business Combination.

Previous wording

Under the terms of the Business Combination, upon Closing, the Sponsor and the selling shareholders of TWMH, TIG, and Alvarium became entitled to receive earn-out shares contingent on various share price milestones. Additionally, upon a change of control of the Company, the share price milestones will be deemed to have been met and all the Business Combination Earn-out Securities will be payable to the earn-out holders. The earn-out shares are precluded from being considered indexed to the Company’s own stock and are recognized as a liability at fair value with changes in fair value recognized in earnings. As of March 31, 2026 and December 31, 2025, the fair value of the earn-out share liability was $5.1 million and $15.3 million, respectively, which is included in Earn-out liabilities, at fair value presented on the Condensed Consolidated Statements of Financial Position.

Current wording

Under the terms of the Business Combination, upon Closing, the Sponsor and the selling shareholders of TWMH, TIG, and Alvarium became entitled to receive earn-out shares contingent on various share price milestones. Additionally, upon a change of control of the Company, the share price milestones will be deemed to have been met and all the Business Combination Earn-out Securities will be payable to the earn-out holders. The earn-out shares are precluded from being considered indexed to the Company’s own stock and are recognized as a liability at fair value with changes in fair value recognized in earnings. As of June 30, 2026 and December 31, 2025, the fair value of the earn-out share liability was $3.7 million and $15.3 million, respectively, which is included in Earn-out liabilities, at fair value presented on the Condensed Consolidated Statements of Financial Position.

Previous wording

On April 1, 2024, the Company acquired all of the issued and outstanding ownership and membership interests of EEA. The EEA Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $93.1 million. Included in the total purchase consideration is estimated contingent consideration of $23.3 million, for which the Company may be required to make additional cash payments contingent on the future EBITDA performance targets between the closing date and the fifth anniversary of the closing date. As of March 31, 2026 and December 31, 2025, the fair value of the earn-out share liability was $26.3 million and $25.3 million, respectively, which is included in Earn-out liabilities, at fair value presented on the Condensed Consolidated Statements of Financial Position.

Current wording

On April 1, 2024, the Company acquired all of the issued and outstanding ownership and membership interests of EEA. The EEA Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $93.1 million. Included in the total purchase consideration is estimated contingent consideration of $23.3 million, for which the Company may be required to make additional cash payments contingent on the future EBITDA performance targets between the closing date and the fifth anniversary of the closing date. As of June 30, 2026 and December 31, 2025, the fair value of the earn-out share liability was $19.5 million and $25.3 million, respectively, which is included in Earn-out liabilities, at fair value presented on the Condensed Consolidated Statements of Financial Position.

Previous wording

On July 1, 2024, the Company acquired substantially all of the assets of Envoi pursuant to the terms of the Envoi Acquisition. The Envoi Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $34.3 million. The total purchase consideration transferred includes estimated contingent consideration totaling $9.0 million, comprised of the Envoi earn-out consideration liability and the Envoi earn-out growth consideration liability, for which the Company may be required to pay additional cash or equity consideration contingent on future revenue-based performance targets between the closing date and the fourth anniversary of the closing date. As of March 31, 2026 and December 31, 2025, the Envoi earn-out consideration liability of $7.8 million and $8.2 million, respectively, and the Envoi earn-out growth consideration liability of $1.5 million and $1.6 million, respectively, are included in Earn-out liabilities, at fair value presented on the Condensed Consolidated Statements of Financial Position.

Current wording

On July 1, 2024, the Company acquired substantially all of the assets of Envoi pursuant to the terms of the Envoi Acquisition. The Envoi Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $34.3 million. The total purchase consideration transferred includes estimated contingent consideration totaling $9.0 million, comprised of the Envoi earn-out consideration liability and the Envoi earn-out growth consideration liability, for which the Company may be required to pay additional cash or equity consideration contingent on future revenue-based performance targets between the closing date and the fourth anniversary of the closing date. As of June 30, 2026 and December 31, 2025, the Envoi earn-out consideration liability of $8.5 million and $8.2 million, respectively, and the Envoi earn-out growth consideration liability of $1.6 million and $1.6 million, respectively, are included in Earn-out liabilities, at fair value presented on the Condensed Consolidated Statements of Financial Position.

Previous wording

On April 30, 2025, the Company acquired all of the issued and outstanding ownership interests of Kontora. The Kontora Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $15.7 million. Included in the total purchase consideration is contingent consideration of $5.7 million, comprised of the Kontora earn-out liability, for which the Company may be required to make additional cash payments tied to certain revenue streams acquired in the Kontora Acquisition between the Closing Date and December 31, 2035. As of March 31, 2026 and December 31, 2025, the Kontora earn-out liability of $7.0 million is reported in the Earn-out liabilities, at fair value, in the Condensed Consolidated Statements of Financial Position.

Current wording

On April 30, 2025, the Company acquired all of the issued and outstanding ownership interests of Kontora. The Kontora Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $15.7 million. Included in the total purchase consideration is contingent consideration of $5.7 million, comprised of the Kontora earn-out liability, for which the Company may be required to make additional cash payments tied to certain revenue streams acquired in the Kontora Acquisition between the Closing Date and December 31, 2035. As of June 30, 2026 and December 31, 2025, the Kontora earn-out liability of $6.6 million and $7.0 million, respectively, is reported in the Earn-out liabilities, at fair value, in the Condensed Consolidated Statements of Financial Position.

Previous wording

As of the three months ended March 31, 2026, a provision of $3.6 million has been recognized in relation to this potential future liability. The ultimate loss could differ from the accrued amount.

Current wording

As of June 30, 2026, a provision of $3.5 million has been recognized in relation to this potential future liability. The ultimate loss could differ from the accrued amount.