{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/205/30/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"205","topic_title":"Presentation of Financial Statements","subtopic":"205-30","subtopic_title":"Liquidation Basis of Accounting","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"205-30-25-1","para":"25-1","html":"
An entity shall prepare financial statements in accordance with the requirements of this Subtopic when liquidation is imminent unless the liquidation follows a plan for liquidation that was specified in the entity's governing documents at the entity's inception.
","snippet":"An entity shall prepare financial statements in accordance with the requirements of this Subtopic when liquidation is imminent unless the liquidation follows a plan for liquidation that was specified in the entity's gove…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:df76e8ce820b92fbe26d5f2e01ec9035653351736cfe1f21550962900fc19139","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}},{"citation":"205-30-25-2","para":"25-2","html":"
Liquidation is imminent when either of the following occurs:
  1. a
    A plan for liquidation has been approved by the person or persons with the authority to make such a plan effective, and the likelihood is remote that any of the following will occur:
    1. 1
      Execution of the plan will be blocked by other parties (for example, those with shareholder rights)
    2. 2
      The entity will return from liquidation.
  2. b
    A plan for liquidation is imposed by other forces (for example, involuntary bankruptcy), and the likelihood is remote that the entity will return from liquidation.
","snippet":"Liquidation is imminent when either of the following occurs:\n(a) A plan for liquidation has been approved by the person or persons with the authority to make such a plan effective, and the likelihood is remote that any o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:60183de97b9c58d6da80481125d4a2c6cc1f4d61a5fff7c2fb6b3a28eb640f20","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}},{"citation":"205-30-25-3","para":"25-3","html":"
An entity shall presume that its plan of liquidation does not follow a plan that was specified in the entity's governing documents at its inception if the entity is forced to dispose of its assets in exchange for consideration that is not commensurate with the fair value of those assets. Other aspects of the entity's plan of liquidation also might differ from a plan that was specified in the entity's governing documents at its inception (for example, the date at which liquidation shall commence). However, those factors should be considered in determining whether to apply the liquidation basis of accounting only to the extent that they affect whether the entity expects to receive consideration in exchange for its assets that is not commensurate with fair value.
","snippet":"An entity shall presume that its plan of liquidation does not follow a plan that was specified in the entity's governing documents at its inception if the entity is forced to dispose of its assets in exchange for conside…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1649e19e4c1e8305c270db306f9e5fd91d94b5543dc7b7ad7e0a27393041e20d","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}},{"citation":"205-30-25-4","para":"25-4","html":"
When using the liquidation basis of accounting, an entity shall recognize other items that it previously had not recognized (for example, trademarks) but that it expects to either sell in liquidation or use to settle liabilities. Those items may be recognized in the aggregate.
","snippet":"When using the liquidation basis of accounting, an entity shall recognize other items that it previously had not recognized (for example, trademarks) but that it expects to either sell in liquidation or use to settle lia…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7210a749d6d7956a1391ba39560391eb54005b660240e219a6c51c286941ee23","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}},{"citation":"205-30-25-5","para":"25-5","html":"
An entity shall recognize liabilities in accordance with the recognition provisions of other Topics that otherwise would apply to those liabilities, including paragraph 405-20-40-1.
","snippet":"An entity shall recognize liabilities in accordance with the recognition provisions of other Topics that otherwise would apply to those liabilities, including paragraph 405-20-40-1.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:969734df2547bb6b596b31b62d82528c05af224bf7facf3f6719839795e7243a","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}},{"citation":"205-30-25-6","para":"25-6","html":"
An entity shall accrue estimated costs to dispose of assets or other items that it expects to sell in liquidation and present those costs in the aggregate separately from those assets or items.
","snippet":"An entity shall accrue estimated costs to dispose of assets or other items that it expects to sell in liquidation and present those costs in the aggregate separately from those assets or items.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6e7b217d478049d96c29bf3d9e63f0ccc73c3c73098dcd001c1569a6e8ea74c3","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}},{"citation":"205-30-25-7","para":"25-7","html":"
An entity shall accrue costs and income that it expects to incur or earn (for example, payroll costs or income from preexisting orders that the entity expects to fulfill during liquidation) through the end of its liquidation if and when it has a reasonable basis for estimation.
","snippet":"An entity shall accrue costs and income that it expects to incur or earn (for example, payroll costs or income from preexisting orders that the entity expects to fulfill during liquidation) through the end of its liquida…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bdc9b9025c27d98bcd79dd5288f8f7eb453df64a259693a5ffd0704c6fab7be8","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c11bacbea25b2e8b303ee6565c00eb74335e5ee799537930359afab36614953e","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aa9b2a033f0d52a444a67d7b8b83b45d75fdf931e95f9a068ef1c3d25ecf1075","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aa9b2a033f0d52a444a67d7b8b83b45d75fdf931e95f9a068ef1c3d25ecf1075","downloaded_from":"2026-09-09T22:53:46.857Z","last_downloaded_at":"2026-09-09T22:53:46.857Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480034","source_sha256":"7a59e528dec7ab4dde8a4ee7651e2f407d76eedbb4b7c61d6f7b2c83116bade0"}}