Wiley GAAP 2018, 16th Edition

31ASC 420 Exit or Disposal Cost Obligations

1. Perspective and Issues
   1. Subtopic
   2. Scope and Scope Exceptions
   3. Overview
2. Definitions of Terms
3. Concepts, Rules, and Examples
   1. Employee Termination Benefits
      1. Measurement
      2. Timing
         1. Examples of the Determination of the Minimum Retention Period and Recognition
      3. Subsequent Measurement
      4. Plan Includes Voluntary and Involuntary Benefits
   2. Contract Termination Costs
   3. Other Associated Costs to Exit an Activity
   4. Presentation and Disclosure

Perspective and Issues

Subtopic

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 420-10-15-5)

Overview

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. Also see Appendix A, Definitions of Terms, for: Acquiree, Acquirer, Acquisition by a Not-for-Profit Entity, Business, Business Combination, Legal Entity, Not-for-Profit ...