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Principles of AccountingU.S. GAAP Financial Reporting Guide
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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

Index of U.S. GAAP Financial Reporting Guide

U.S. GAAP by Codification Topics 
 105  GAAP Hierarchy 
 105  GAAP History 

 205  Presentation of Financial Statements 
 205-20 Discontinued Operations 
 210  Balance Sheet 
 210-20 Offsetting 
 220  Comprehensive Income 
 225  Income Statement 
 225-20 Extraordinary and Unusual Items 
 230  Statement of Cash Flows 
 250  Accounting Changes and Error Corrections 
 260  Earnings per Share 
 270  Interim Reporting
 310  Impairment of a Loan
 320  Investment Securities 
 320  Other-Than-Temporary Impairments, FSP FAS 115-2 
 320-10-05 Overview of Investments in Other Entities 
 320-10-35 Reclassification of Investments in Securities
 323-10 Equity Method Investments
 323-30 Investments in Partnerships and Joint Ventures 
 325-20 Cost Method Investments 
 330  Inventory

 340-20 Capitalized Advertising Costs 
 350-20 Goodwill 
 350-30 Intangibles Other than Goodwill 
 350-40 Internal-Use Software 
 350-50 Website Development Costs 
 360  Property, Plant and Equipment
 360-20 Real Estate Sales

 410  Asset Retirement and Environmental Obligations 
 420  Exit or Disposal Cost Obligations 
 450  Contingencies 
 450-20 Loss Contingencies 
 450-30 Gain Contingencies
 480  Redeemable Financial Instruments 

 505-20 Stock Dividends, Stock Splits 
 505-30 Treasury Stock 

 605  SEC Staff Accounting Bulletin, Topic 13 
 605-25 Revenue Recognition - Multiple Element Arrangements 
 715-30 Defined Benefit Plans - Pension
 718  Share-Based Payment 
 730  Research and Development 
 730-20 Research and Development Arrangements 

 805  Business Combinations  
 810  Consolidation 
 810  Noncontrolling Interests 
 810  Consolidation of Variable Interest Entities, SFAS 167 
 815  Derivatives and Hedging Overview 

 820  Fair Value Measurements  
 820  Fair value when the markets are not active, FSP FAS 157-4
 825  Fair Value Option 

 830  Foreign Currency Matters 
 830-20 Foreign Currency Transactions 
 830-30 Translation of Financial Statements 
 835  Interest 
 835-20 Capitalization of Interest 
 835-30 Imputation of Interest 

 840  Leases 
 840-20 Operating Leases 
 840-30 Capital Leases 
 840-40 Sale-Leaseback Transactions
 845  Nonmonetary Transactions 

 855  Subsequent Events 
 860-20 Sale of Financial Assets, SFAS 166 
 860-50 Servicing Assets and Liabilities, SFAS 156 

 985-20 Costs of software to be sold  

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