# ASC 205-30-30: Presentation of Financial Statements — Liquidation Basis of Accounting — 30 Initial Measurement

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/205/30/#30-initial-measurement)

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## ASC 205-30-30: 30 Initial Measurement

[Read section](https://asc.understandingaccounting.org/asc/205/30/#30-initial-measurement)

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##### [205-30-30-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-1)

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An entity shall measure assets to reflect the estimated amount of cash or other consideration that it expects to collect in settling or disposing of those assets in carrying out its plan for [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation."). In some cases, [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") may approximate the amount that an entity expects to collect. However, an entity shall not presume this to be true for all assets.

##### [205-30-30-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-2)

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An entity shall measure liabilities in accordance with the measurement provisions of other Topics that otherwise would apply to those liabilities (excluding the accrual of estimated disposal costs as described in paragraph [205-30-25-6](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-6) and expected income and expenses as described in paragraph [205-30-25-7](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-7)). In applying those other Topics, an entity shall adjust its liabilities to reflect changes in assumptions that are a result of the entity's decision to liquidate (for example, timing of payments). However, an entity shall not anticipate being legally released from being the primary obligor under a liability, either judicially or by the creditor.

##### [205-30-30-3](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-3)

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An entity shall not apply discounting provisions in measuring the accruals for estimated disposal costs in accordance with paragraph [205-30-25-6](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-6) and expected income and expenses in accordance with paragraph [205-30-25-7](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-7).