diff --git a/coroutines-guide.md b/coroutines-guide.md
index ea512ba68d..09cfb93cab 100644
--- a/coroutines-guide.md
+++ b/coroutines-guide.md
@@ -20,6 +20,7 @@ The main coroutines guide has moved to the [docs folder](docs/coroutines-guide.m
   * <a name='closing-resources-with-finally'></a>[Closing resources with `finally`](docs/cancellation-and-timeouts.md#closing-resources-with-finally)
   * <a name='run-non-cancellable-block'></a>[Run non-cancellable block](docs/cancellation-and-timeouts.md#run-non-cancellable-block)
   * <a name='timeout'></a>[Timeout](docs/cancellation-and-timeouts.md#timeout)
+  * <a name='asynchronous-timeout-and-resources'></a>[Asynchronous timeout and resources](docs/cancellation-and-timeouts.md#asynchronous-timeout-and-resources)
 <!--- TOC_REF docs/composing-suspending-functions.md -->
 * <a name='composing-suspending-functions'></a>[Composing Suspending Functions](docs/composing-suspending-functions.md#composing-suspending-functions)
   * <a name='sequential-by-default'></a>[Sequential by default](docs/composing-suspending-functions.md#sequential-by-default)
diff --git a/docs/cancellation-and-timeouts.md b/docs/cancellation-and-timeouts.md
index d8d5b7bad4..b296bde493 100644
--- a/docs/cancellation-and-timeouts.md
+++ b/docs/cancellation-and-timeouts.md
@@ -11,6 +11,7 @@
   * [Closing resources with `finally`](#closing-resources-with-finally)
   * [Run non-cancellable block](#run-non-cancellable-block)
   * [Timeout](#timeout)
+  * [Asynchronous timeout and resources](#asynchronous-timeout-and-resources)
 
 <!--- END -->
 
@@ -355,6 +356,114 @@ Result is null
 
 <!--- TEST -->
 
+### Asynchronous timeout and resources
+
+<!-- 
+  NOTE: Don't change this section name. It is being referenced to from within KDoc of withTimeout functions.
+-->
+
+The timeout event in [withTimeout] is asynchronous with respect to the code running in its block and may happen at any time,
+even right before the return from inside of the timeout block. Keep this in mind if you open or acquire some
+resource inside the block that needs closing or release outside of the block. 
+
+For example, here we imitate a closeable resource with the `Resource` class, that simply keeps track of how many times 
+it was created by incrementing the `acquired` counter and decrementing this counter from its `close` function.
+Let us run a lot of coroutines with the small timeout try acquire this resource from inside
+of the `withTimeout` block after a bit of delay and release it from outside.
+
+<div class="sample" markdown="1" theme="idea" data-min-compiler-version="1.3">
+
+```kotlin
+import kotlinx.coroutines.*
+
+//sampleStart
+var acquired = 0
+
+class Resource {
+    init { acquired++ } // Acquire the resource
+    fun close() { acquired-- } // Release the resource
+}
+
+fun main() {
+    runBlocking {
+        repeat(100_000) { // Launch 100K coroutines
+            launch { 
+                val resource = withTimeout(60) { // Timeout of 60 ms
+                    delay(50) // Delay for 50 ms
+                    Resource() // Acquire a resource and return it from withTimeout block     
+                }
+                resource.close() // Release the resource
+            }
+        }
+    }
+    // Outside of runBlocking all coroutines have completed
+    println(acquired) // Print the number of resources still acquired
+}
+//sampleEnd
+``` 
+
+</div>
+
+> You can get the full code [here](../kotlinx-coroutines-core/jvm/test/guide/example-cancel-08.kt).
+
+<!--- CLEAR -->
+
+If you run the above code you'll see that it does not always print zero, though it may depend on the timings 
+of your machine you may need to tweak timeouts in this example to actually see non-zero values. 
+
+> Note, that incrementing and decrementing `acquired` counter here from 100K coroutines is completely safe,
+> since it always happens from the same main thread. More on that will be explained in the next chapter
+> on coroutine context.
+
+To workaround this problem you can store a reference to the resource in the variable as opposed to returning it 
+from the `withTimeout` block. 
+
+<div class="sample" markdown="1" theme="idea" data-min-compiler-version="1.3">
+  
+```kotlin
+import kotlinx.coroutines.*
+
+var acquired = 0
+
+class Resource {
+    init { acquired++ } // Acquire the resource
+    fun close() { acquired-- } // Release the resource
+}
+
+fun main() {
+//sampleStart
+    runBlocking {
+        repeat(100_000) { // Launch 100K coroutines
+            launch { 
+                var resource: Resource? = null // Not acquired yet
+                try {
+                    withTimeout(60) { // Timeout of 60 ms
+                        delay(50) // Delay for 50 ms
+                        resource = Resource() // Store a resource to the variable if acquired      
+                    }
+                    // We can do something else with the resource here
+                } finally {  
+                    resource?.close() // Release the resource if it was acquired
+                }
+            }
+        }
+    }
+    // Outside of runBlocking all coroutines have completed
+    println(acquired) // Print the number of resources still acquired
+//sampleEnd
+}
+``` 
+
+</div>
+ 
+> You can get the full code [here](../kotlinx-coroutines-core/jvm/test/guide/example-cancel-09.kt).
+
+This example always prints zero. Resources do not leak.
+
+<!--- TEST 
+0
+-->
+
 <!--- MODULE kotlinx-coroutines-core -->
 <!--- INDEX kotlinx.coroutines -->
 [launch]: https://kotlin.github.io/kotlinx.coroutines/kotlinx-coroutines-core/kotlinx.coroutines/launch.html
diff --git a/kotlinx-coroutines-core/common/src/Timeout.kt b/kotlinx-coroutines-core/common/src/Timeout.kt
index c8e4455c92..8547358b78 100644
--- a/kotlinx-coroutines-core/common/src/Timeout.kt
+++ b/kotlinx-coroutines-core/common/src/Timeout.kt
@@ -24,7 +24,14 @@ import kotlin.time.*
  * The sibling function that does not throw an exception on timeout is [withTimeoutOrNull].
  * Note that the timeout action can be specified for a [select] invocation with [onTimeout][SelectBuilder.onTimeout] clause.
  *
- * Implementation note: how the time is tracked exactly is an implementation detail of the context's [CoroutineDispatcher].
+ * **The timeout event is asynchronous with respect to the code running in the block** and may happen at any time,
+ * even right before the return from inside of the timeout [block]. Keep this in mind if you open or acquire some
+ * resource inside the [block] that needs closing or release outside of the block.
+ * See the
+ * [Asynchronous timeout and resources][https://kotlinlang.org/docs/reference/coroutines/cancellation-and-timeouts.html#asynchronous-timeout-and-resources]
+ * section of the coroutines guide for details.
+ *
+ * > Implementation note: how the time is tracked exactly is an implementation detail of the context's [CoroutineDispatcher].
  *
  * @param timeMillis timeout time in milliseconds.
  */
@@ -48,7 +55,14 @@ public suspend fun <T> withTimeout(timeMillis: Long, block: suspend CoroutineSco
  * The sibling function that does not throw an exception on timeout is [withTimeoutOrNull].
  * Note that the timeout action can be specified for a [select] invocation with [onTimeout][SelectBuilder.onTimeout] clause.
  *
- * Implementation note: how the time is tracked exactly is an implementation detail of the context's [CoroutineDispatcher].
+ * **The timeout event is asynchronous with respect to the code running in the block** and may happen at any time,
+ * even right before the return from inside of the timeout [block]. Keep this in mind if you open or acquire some
+ * resource inside the [block] that needs closing or release outside of the block.
+ * See the
+ * [Asynchronous timeout and resources][https://kotlinlang.org/docs/reference/coroutines/cancellation-and-timeouts.html#asynchronous-timeout-and-resources]
+ * section of the coroutines guide for details.
+ *
+ * > Implementation note: how the time is tracked exactly is an implementation detail of the context's [CoroutineDispatcher].
  */
 @ExperimentalTime
 public suspend fun <T> withTimeout(timeout: Duration, block: suspend CoroutineScope.() -> T): T {
@@ -68,7 +82,14 @@ public suspend fun <T> withTimeout(timeout: Duration, block: suspend CoroutineSc
  * The sibling function that throws an exception on timeout is [withTimeout].
  * Note that the timeout action can be specified for a [select] invocation with [onTimeout][SelectBuilder.onTimeout] clause.
  *
- * Implementation note: how the time is tracked exactly is an implementation detail of the context's [CoroutineDispatcher].
+ * **The timeout event is asynchronous with respect to the code running in the block** and may happen at any time,
+ * even right before the return from inside of the timeout [block]. Keep this in mind if you open or acquire some
+ * resource inside the [block] that needs closing or release outside of the block.
+ * See the
+ * [Asynchronous timeout and resources][https://kotlinlang.org/docs/reference/coroutines/cancellation-and-timeouts.html#asynchronous-timeout-and-resources]
+ * section of the coroutines guide for details.
+ *
+ * > Implementation note: how the time is tracked exactly is an implementation detail of the context's [CoroutineDispatcher].
  *
  * @param timeMillis timeout time in milliseconds.
  */
@@ -101,7 +122,14 @@ public suspend fun <T> withTimeoutOrNull(timeMillis: Long, block: suspend Corout
  * The sibling function that throws an exception on timeout is [withTimeout].
  * Note that the timeout action can be specified for a [select] invocation with [onTimeout][SelectBuilder.onTimeout] clause.
  *
- * Implementation note: how the time is tracked exactly is an implementation detail of the context's [CoroutineDispatcher].
+ * **The timeout event is asynchronous with respect to the code running in the block** and may happen at any time,
+ * even right before the return from inside of the timeout [block]. Keep this in mind if you open or acquire some
+ * resource inside the [block] that needs closing or release outside of the block.
+ * See the
+ * [Asynchronous timeout and resources][https://kotlinlang.org/docs/reference/coroutines/cancellation-and-timeouts.html#asynchronous-timeout-and-resources]
+ * section of the coroutines guide for details.
+ *
+ * > Implementation note: how the time is tracked exactly is an implementation detail of the context's [CoroutineDispatcher].
  */
 @ExperimentalTime
 public suspend fun <T> withTimeoutOrNull(timeout: Duration, block: suspend CoroutineScope.() -> T): T? =
diff --git a/kotlinx-coroutines-core/jvm/test/guide/example-cancel-08.kt b/kotlinx-coroutines-core/jvm/test/guide/example-cancel-08.kt
new file mode 100644
index 0000000000..e7def132ae
--- /dev/null
+++ b/kotlinx-coroutines-core/jvm/test/guide/example-cancel-08.kt
@@ -0,0 +1,31 @@
+/*
+ * Copyright 2016-2020 JetBrains s.r.o. Use of this source code is governed by the Apache 2.0 license.
+ */
+
+// This file was automatically generated from cancellation-and-timeouts.md by Knit tool. Do not edit.
+package kotlinx.coroutines.guide.exampleCancel08
+
+import kotlinx.coroutines.*
+
+var acquired = 0
+
+class Resource {
+    init { acquired++ } // Acquire the resource
+    fun close() { acquired-- } // Release the resource
+}
+
+fun main() {
+    runBlocking {
+        repeat(100_000) { // Launch 100K coroutines
+            launch { 
+                val resource = withTimeout(60) { // Timeout of 60 ms
+                    delay(50) // Delay for 50 ms
+                    Resource() // Acquire a resource and return it from withTimeout block     
+                }
+                resource.close() // Release the resource
+            }
+        }
+    }
+    // Outside of runBlocking all coroutines have completed
+    println(acquired) // Print the number of resources still acquired
+}
diff --git a/kotlinx-coroutines-core/jvm/test/guide/example-cancel-09.kt b/kotlinx-coroutines-core/jvm/test/guide/example-cancel-09.kt
new file mode 100644
index 0000000000..95424f5108
--- /dev/null
+++ b/kotlinx-coroutines-core/jvm/test/guide/example-cancel-09.kt
@@ -0,0 +1,36 @@
+/*
+ * Copyright 2016-2020 JetBrains s.r.o. Use of this source code is governed by the Apache 2.0 license.
+ */
+
+// This file was automatically generated from cancellation-and-timeouts.md by Knit tool. Do not edit.
+package kotlinx.coroutines.guide.exampleCancel09
+
+import kotlinx.coroutines.*
+
+var acquired = 0
+
+class Resource {
+    init { acquired++ } // Acquire the resource
+    fun close() { acquired-- } // Release the resource
+}
+
+fun main() {
+    runBlocking {
+        repeat(100_000) { // Launch 100K coroutines
+            launch { 
+                var resource: Resource? = null // Not acquired yet
+                try {
+                    withTimeout(60) { // Timeout of 60 ms
+                        delay(50) // Delay for 50 ms
+                        resource = Resource() // Store a resource to the variable if acquired      
+                    }
+                    // We can do something else with the resource here
+                } finally {  
+                    resource?.close() // Release the resource if it was acquired
+                }
+            }
+        }
+    }
+    // Outside of runBlocking all coroutines have completed
+    println(acquired) // Print the number of resources still acquired
+}
diff --git a/kotlinx-coroutines-core/jvm/test/guide/test/CancellationGuideTest.kt b/kotlinx-coroutines-core/jvm/test/guide/test/CancellationGuideTest.kt
index a2e91de82d..ca2910fb63 100644
--- a/kotlinx-coroutines-core/jvm/test/guide/test/CancellationGuideTest.kt
+++ b/kotlinx-coroutines-core/jvm/test/guide/test/CancellationGuideTest.kt
@@ -87,4 +87,11 @@ class CancellationGuideTest {
             "Result is null"
         )
     }
+
+    @Test
+    fun testExampleCancel09() {
+        test("ExampleCancel09") { kotlinx.coroutines.guide.exampleCancel09.main() }.verifyLines(
+            "0"
+        )
+    }
 }