28 ASC 420 EXIT OR DISPOSAL COST OBLIGATIONS
PERSPECTIVE AND ISSUES
ASC 420, Exit or Disposal Cost Activities, consists of one subtopic:
ASC 420-10, Overall, which provides guidance on the definition, reporting and disclosure of such costs.
Scope and Scope Exceptions
ASC 420 applies to all entities. It does not apply to:
- Costs associated with the retirement of a long-lived asset covered by ASC 410-20
- Impairment of an unrecognized asset while it is being used.
ASC 420-10-15-4 clarifies that an exit activity includes, but is not limited to:
- A restructuring
- The sale or termination of a line of business
- The closure of business activities in a particular location
- The relocation of business activities
- Changes in management structure
- A fundamental reorganization that affects the nature and focus of operation.
DEFINITIONS OF TERMS
Source: ASC 420-10-20
The business or businesses that the acquirer obtains control of in a business combination. This term also includes a nonprofit activity or business that a not-for-profit acquirer ...