Wiley GAAP 2020

29ASC 420 EXIT OR DISPOSAL COST OBLIGATIONS

• Perspective and Issues
  • Subtopic
  • Scope and Scope Exceptions
• Definitions of Terms
• Concepts, Rules, and Examples
  • General
    • When to Recognize a Liability
  • Employee Termination Benefits
    • Measurement
    • Timing
    • Examples of the Determination of the Minimum Retention Period and Recognition
    • Subsequent Measurement
    • Plan Includes Voluntary and Involuntary Benefits
  • Contract Termination Costs
  • Other Associated Costs to Exit an Activity
  • 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 disclo- sure 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)

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, ...