|
Section 5330: Disposal Cost Obligations
[U.S. GAAP Codification Topic]
420 Exit or disposal cost obligations
420-10 Overall
[U.S. GAAP before the Codification]
SFAS 146, June 2002, Accounting for Costs Associated with Exit or Disposal Activities
1. 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
2. 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
3. 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
4. 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
5. 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
|