U.S. GAAP Codification of Accounting Standards

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U.S. GAAP Accounting Standards
Codification Topic 420: Exit or Disposal Cost Obligations


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Codification Topic 420
Exit or Disposal Cost Obligations


Exit or Disposal Cost Obligations
SFAS 146, June 2002
"Accounting for Costs Associated with Exit or Disposal Activities"

Exit or disposal cost obligations
1. Costs to terminate a contract other than a capital lease
2. Costs to close facilities and relocate employees
3. One-time employee termination benefits

Initial measurement
1. A liability for exit or disposal costs is recognized 
--> when the liability is incurred

2. Initially measured at fair value

3. If fair value cannot be reasonably estimated
--> a liability is recognized when fair value can be reasonably estimated

One-time employee termination benefits
1. If employees are required to provide service
--> until they are terminated to received termination benefits
--> termination benefits liability is measured at the communication date
--> based on (A)
(A) the fair value at termination date

2. If employees are not required to provide service 
--> until they are terminated to received termination benefits
--> termination benefit liability is measured at (B)
(B) the fair value at communication date


Subsequent measurement
1. Changes to the liability are measured 
--> using "credit-adjusted risk-free rate"

2. Changes due to (C) are recognized 
--> as an increase in the liability and
--> as an expense
(C) the passage of time

3. Cumulative effect of changes due to (D) 
--> adjusts the liability when the change occurs
(D) the revisions to estimated cash flows


International Financial Reporting Standards (IFRS)

   IAS 37: Provisions, contingent liabilities and contingent assets


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   Codification Topic 420
   Exit or Disposal Cost Obligations
 
Subtopics of Codification Topic 420
 
   420-10 Overall   
 
Accounting Terms of Codification Topic 420-10
 
   Cease-use date
   Communication date
   Legal notification period
   One-time employee termination benefits
   Restructuring



   Other Topics at the Codification 400 
Accounting Standards Codification, ASC, Overview
 
ASC Codification Topic 405: Liabilities
 
ASC Codification Topic 410: Asset Retirement and Environmental Obligations
 
ASC Codification Topic 420: Exit or Disposal Cost Obligations
 
ASC Codification Topic 430: Deferred Revenue
 
ASC Codification Topic 440: Commitments
 
ASC Codification Topic 450: Contingencies
 
ASC Codification Topic 460: Guarantees
 
ASC Codification Topic 470: Debt
 
ASC Codification Topic 480: Distinguishing Liabilities from Equity


   U.S. GAAP Codification of Accounting Standards
Accounting Standards Codification, ASC, Overview
ASC Codification 200: Presentation
ASC Codification 300: Assets
ASC Codification 400: Liabilities
ASC Codification 500: Equity
ASC Codification 600: Revenue
ASC Codification 700: Expenses
ASC Codification 800: Broad Transactions
ASC Codification 900: Industry

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