# ASC 205-30: Presentation of Financial Statements — Liquidation Basis of Accounting Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/205/30/) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T22:53:35.692Z to 2026-09-09T22:54:07.641Z Record version: sha256:eed3e976f780674de35cdee4e7db643b0fe4582bc54ec0b8a90fb63abb0bfdcd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30: Presentation of Financial Statements — Liquidation Basis of Accounting ### Machine-generated study aids ```json { "summary": "ASC 205-30 tells an entity when it must abandon going-concern accounting and switch to the liquidation basis, how to measure assets and liabilities under that basis, and what to disclose. The trigger is that liquidation is \"imminent\" (205-30-25-1 and 25-2), unless the liquidation follows a plan specified in the entity's governing documents at inception. Under the liquidation basis, assets are measured at the estimated cash or other consideration expected to be collected, previously unrecognized items such as trademarks are recognized, expected disposal costs and income/expenses through the end of liquidation are accrued (undiscounted), and the entity presents a statement of net assets in liquidation and a statement of changes in net assets in liquidation.", "key_points": [ "Liquidation basis is required when liquidation is imminent, unless the liquidation follows a plan for liquidation specified in the entity's governing documents at inception (205-30-25-1); investment companies regulated under the Investment Company Act of 1940 are scoped out and the exception may not be applied by analogy (205-30-15-1).", "Liquidation is imminent when a plan is approved by those with authority to make it effective and the likelihood is remote both that other parties will block it and that the entity will return from liquidation, or when a plan is imposed by other forces such as involuntary bankruptcy and return from liquidation is remote (205-30-25-2).", "An inception-specified plan is presumed not to be followed if the entity is forced to dispose of assets for consideration not commensurate with fair value; other deviations matter only to the extent they affect whether consideration is commensurate with fair value (205-30-25-3).", "Assets are measured at the estimated amount of cash or other consideration expected to be collected in settling or disposing of them, which cannot be presumed to equal fair value for all assets (205-30-30-1), and previously unrecognized items expected to be sold or used to settle liabilities (e.g., trademarks) are recognized, possibly in the aggregate (205-30-25-4).", "Liabilities continue to be recognized and measured under other applicable Topics (including 405-20-40-1), adjusted for changed assumptions such as payment timing, but the entity shall not anticipate being legally released as primary obligor (205-30-25-5; 205-30-30-2).", "Estimated disposal costs are accrued and presented in the aggregate separately from the related assets, and expected costs and income through the end of liquidation are accrued when reasonably estimable; neither accrual is discounted (205-30-25-6; 25-7; 205-30-30-3), and all amounts are remeasured at each reporting date (205-30-35-1).", "The entity must present at a minimum a statement of net assets in liquidation and a statement of changes in net assets in liquidation, applied prospectively from the day liquidation became imminent (205-30-45-1; 45-2), and disclose the basis and circumstances of adoption, the liquidation plan and expected completion date, measurement methods and significant assumptions, and accrued costs and income (205-30-50-2)." ], "categories": [ "Presentation", "Financial statement presentation", "Subsequent measurement", "Disclosure" ], "audience_level": "intermediate", "student_note": "This is the one place in GAAP where the going-concern measurement model is replaced wholesale, so exams focus on the \"imminent\" trigger and the two required statements. Common misunderstandings: assuming liquidation-basis asset amounts equal fair value (they are expected collectible consideration, which may differ), forgetting that liabilities still follow their own Topics and cannot be reduced for anticipated legal release, and discounting the disposal-cost and expected income accruals.", "related_topics": [ "205-40", "405-20", "820", "852", "360" ], "key_concepts": [ "liquidation basis of accounting", "liquidation is imminent", "plan for liquidation", "statement of net assets in liquidation", "statement of changes in net assets in liquidation", "expected collectible consideration", "accrued disposal costs", "previously unrecognized assets" ] } ``` Source downloaded (UTC): 2026-09-09T22:53:35.692Z to 2026-09-09T22:53:35.692Z Record version: sha256:726d6bbc62f24724de7f05ec91d4610aad4261b3e7d83047488cb7eca8ebad09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/30/#00-status) SEC content: no ##### [205-30-00-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:35.692Z to 2026-09-09T22:53:35.692Z Record version: sha256:27b8179a159ce03f7f956a736d825a469eda2f73b8e83de63d6dc01e76e15c90 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Fair ValueAddedAccounting Standards Update No. 2013-0704/22/2013
LiquidationAddedAccounting Standards Update No. 2013-0704/22/2013
RemoteAddedMaintenance Update 2016-17 (PDF)09/02/2016
Statement of Changes in Net Assets in LiquidationAddedAccounting Standards Update No. 2013-0704/22/2013
Statement of Net Assets in LiquidationAddedAccounting Standards Update No. 2013-0704/22/2013
205-30-05-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-15-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-25-1 through 25-7
AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-25-2AmendedMaintenance Update 2016-17 (PDF)09/02/2016
205-30-30-1 through 30-3
AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-35-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-45-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-45-2AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-50-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-50-2AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-55-1 through 55-3
AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-65-1AddedAccounting Standards Update No. 2013-0704/22/2013
Source downloaded (UTC): 2026-09-09T22:53:38.416Z to 2026-09-09T22:53:38.416Z Record version: sha256:41b245091fb376539d202948a5ba5488b01f509159779b6f750864e2b1d43168 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/30/#05-overview-and-background) SEC content: no ##### [205-30-05-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:38.416Z to 2026-09-09T22:53:38.416Z Record version: sha256:4121f9ec89b12d1c880d40fabcead32cdca177281f9e673e50fe741d9c81a709 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Liquidation Basis of Accounting Subtopic provides guidance on when and how an entity should prepare its financial statements using the liquidation basis of accounting and describes the related disclosures that should be made. Source downloaded (UTC): 2026-09-09T22:53:41.204Z to 2026-09-09T22:53:41.204Z Record version: sha256:8a14ea085a083f3b7c4a46cb886088c4629e0da29cff757fe462efe93d23cd14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/30/#15-scope-and-scope-exceptions) SEC content: no ##### [205-30-15-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:41.204Z to 2026-09-09T22:53:41.204Z Record version: sha256:41887e4c620926bfd119d9c2a4cf858bc9736169f87f97834ef70c55972906e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities except for investment companies regulated under the Investment Company Act of 1940. Other entities shall not apply this scope exception by analogy. Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:aa9b2a033f0d52a444a67d7b8b83b45d75fdf931e95f9a068ef1c3d25ecf1075 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/205/30/#25-recognition) SEC content: no ##### [205-30-25-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:df76e8ce820b92fbe26d5f2e01ec9035653351736cfe1f21550962900fc19139 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall prepare financial statements in accordance with the requirements of this Subtopic when [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.") is imminent unless the liquidation follows a plan for liquidation that was specified in the entity's governing documents at the entity's inception. ##### [205-30-25-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:60183de97b9c58d6da80481125d4a2c6cc1f4d61a5fff7c2fb6b3a28eb640f20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/r/#remote "The chance of the future event or events occurring is slight.") 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. ##### [205-30-25-3](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:1649e19e4c1e8305c270db306f9e5fd91d94b5543dc7b7ad7e0a27393041e20d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](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.") 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. ##### [205-30-25-4](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:7210a749d6d7956a1391ba39560391eb54005b660240e219a6c51c286941ee23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [205-30-25-5](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:969734df2547bb6b596b31b62d82528c05af224bf7facf3f6719839795e7243a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1). ##### [205-30-25-6](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:6e7b217d478049d96c29bf3d9e63f0ccc73c3c73098dcd001c1569a6e8ea74c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [205-30-25-7](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:bdc9b9025c27d98bcd79dd5288f8f7eb453df64a259693a5ffd0704c6fab7be8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-09T22:53:49.289Z to 2026-09-09T22:53:49.289Z Record version: sha256:e24086e1610f27229221146729dfa8f97281ba2154df43a4a965779c58e2ac5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/205/30/#30-initial-measurement) SEC content: no ##### [205-30-30-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:49.289Z to 2026-09-09T22:53:49.289Z Record version: sha256:b1e7b585e61f15435b99443205c2df253a35559a1c6e7bf45478ad8a86371e5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:49.289Z to 2026-09-09T22:53:49.289Z Record version: sha256:89caac955b172096253727c18280eb37695d646e7ef85a2f736d3afcd3a5649b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:49.289Z to 2026-09-09T22:53:49.289Z Record version: sha256:3f271a22d84270f577b00625ec67e59476d55e16dc14d9db378e38933d19b56c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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). Source downloaded (UTC): 2026-09-09T22:53:51.962Z to 2026-09-09T22:53:51.962Z Record version: sha256:b4b203761e36b8dfa3d3364bae12ca0f9a7ac99944c3bb56e921be90c4ff21d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/205/30/#35-subsequent-measurement) SEC content: no ##### [205-30-35-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:51.962Z to 2026-09-09T22:53:51.962Z Record version: sha256:6bdd0923f4c3d484dc669a52f0d46bb2e2bdeea10de3eefbed9dce90ffc8644f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At each reporting date, an entity shall remeasure its assets and other items it expects to sell that it had not previously recognized (for example, trademarks), liabilities (if required under the relevant Topic for those liabilities), and the accruals of disposal or other costs or income to reflect the actual or estimated change in carrying value since the previous reporting date in accordance with paragraphs [205-30-30-1 through 30-3](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-1) . Source downloaded (UTC): 2026-09-09T22:53:54.855Z to 2026-09-09T22:53:54.855Z Record version: sha256:b402f9a242c8d39dbe280a12465bc1122106bd07d3824d5cf2a0fa8b09e0ad24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/30/#45-other-presentation-matters) SEC content: no ##### [205-30-45-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:54.855Z to 2026-09-09T22:53:54.855Z Record version: sha256:ff1ef712c21abb9a5b977fc0ed653286aae71a317033f28a597677c2c2312e91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At a minimum, an entity that applies the liquidation basis of accounting shall prepare the following: 1. a A [statement of net assets in liquidation](https://asc.understandingaccounting.org/glossary/s/#statement-of-net-assets-in-liquidation "A statement that presents a liquidating entity's net assets available for distribution to investors and other claimants as of the end of the reporting period.") 2. b A [statement of changes in net assets in liquidation](https://asc.understandingaccounting.org/glossary/s/#statement-of-changes-in-net-assets-in-liquidation "A statement that presents the changes during the period in net assets available for distribution to investors and other claimants during liquidation."). ##### [205-30-45-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:54.855Z to 2026-09-09T22:53:54.855Z Record version: sha256:c92d5e960a5ff5b867f50d09378d76e5e6355291d2340fdeb7148dbb783551a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The liquidation basis of accounting shall be applied prospectively from the day that liquidation becomes imminent. The initial statement of changes in net assets in liquidation shall present only changes in net assets that occurred during the period since liquidation became imminent. Source downloaded (UTC): 2026-09-09T22:53:56.717Z to 2026-09-09T22:53:56.717Z Record version: sha256:e376bcf208f6bccc7042c11f568e23b8f6b334f3bd766ca0b466153e4f980738 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/30/#50-disclosure) SEC content: no ##### [205-30-50-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:56.717Z to 2026-09-09T22:53:56.717Z Record version: sha256:153cd1a5504c5d1137812175715a18d5a5090561a3ec1bcef84c56c97e07e112 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall make all disclosures required by other Topics that are relevant to understanding the entity's [statement of net assets in liquidation](https://asc.understandingaccounting.org/glossary/s/#statement-of-net-assets-in-liquidation "A statement that presents a liquidating entity's net assets available for distribution to investors and other claimants as of the end of the reporting period.") and [statement of changes in net assets in liquidation](https://asc.understandingaccounting.org/glossary/s/#statement-of-changes-in-net-assets-in-liquidation "A statement that presents the changes during the period in net assets available for distribution to investors and other claimants during liquidation."). The disclosures shall convey information about the amount of cash or other consideration that an entity expects to collect and the amount that the entity is obligated or expects to be obligated (in the case of the accruals described in paragraphs [205-30-25-6 through 25-7](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-6) ) to pay during the course of [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."). ##### [205-30-50-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:56.717Z to 2026-09-09T22:53:56.717Z Record version: sha256:4c687c455adb43a8cbe91b82f04f9ff7ab953c0820f84c0396b1048969654da4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At a minimum, an entity shall disclose all of the following when it prepares financial statements using the liquidation basis of accounting: 1. a That the financial statements are prepared using the liquidation basis of accounting, including the facts and circumstances surrounding the adoption of the liquidation basis of accounting and the entity's determination that liquidation is imminent. 2. b A description of the entity's plan for liquidation, including a description of each of the following: 1. 1 The manner by which it expects to dispose of its assets and other items it expects to sell that it had not previously recognized as assets (for example, trademarks) 2. 2 The manner by which it expects to settle its liabilities 3. 3 The expected date by which the entity expects to complete its liquidation. 3. c The methods and significant assumptions used to measure assets and liabilities, including any subsequent changes to those methods and assumptions. 4. d The type and amount of costs and income accrued in the statement of net assets in liquidation and the period over which those costs are expected to be paid or income earned. Source downloaded (UTC): 2026-09-09T22:54:00.858Z to 2026-09-09T22:54:00.858Z Record version: sha256:12b526317ad2249054ca7dc4e4177020cdf25b065e3866a4ae58294dfeb07c52 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/30/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [205-30-55-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:00.858Z to 2026-09-09T22:54:00.858Z Record version: sha256:457d38d8ea2cacb1d7f2098d4ec6f2ae88113f907212e0535bfaf62e1b79fe5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Examples illustrate how an entity would determine when it should apply the liquidation basis of accounting. The Examples are not intended to capture every scenario under which an entity might have to apply the liquidation basis of accounting. ##### [205-30-55-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:00.858Z to 2026-09-09T22:54:00.858Z Record version: sha256:a403db9b83a8a509756117f4358dd47b55a1cebee8fe7a8c3b376711603b32ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A is a manufacturer of goods. In 20X3, Entity A began experiencing financial difficulty because of declining market demand for its goods. On September 19, 20X3, Entity A's board of directors approved a 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."). The board of directors had the authority to make the plan effective. There were no other parties that could block the execution of the plan, and the likelihood that the entity would return from liquidation was remote. Entity A should begin applying the liquidation basis of accounting as of September 19, 20X3, which is the date that Entity A's board of directors approved the plan for liquidation. ##### [205-30-55-3](https://asc.understandingaccounting.org/asc/205/30/#205-30-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:00.858Z to 2026-09-09T22:54:00.858Z Record version: sha256:5d72938fcd62e896c4ab4ea3db998ffcce43ad42ddce7fd69a339e4ff5d04944 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The governing documents from Entity B's inception specified that its contractual life would end in Year 10. On March 11 of Year 6, Entity B's board of directors determined that the entity would not be able to meet its debt obligations and voted to begin liquidating the entity earlier than planned. Entity B required approval from Entity C, a third party, to make its plan of liquidation effective. Entity B obtained approval from Entity C on April 10 of Year 6. No other parties could block the execution of the plan of liquidation, and the likelihood that Entity B would return from liquidation was remote. Under the plan of liquidation, Entity B anticipated that it would not have sufficient time to sell its assets in exchange for consideration that would approximate the [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.") of those assets. Entity B should begin preparing its financial statements using the liquidation basis of accounting as of April 10 of Year 6, which is the date that the entity had obtained all of the approvals required to make its plan of liquidation effective. Source downloaded (UTC): 2026-09-09T22:54:04.327Z to 2026-09-09T22:54:04.327Z Record version: sha256:82d70dc43bfcd7ef111472ae45858804c76ed841a364cd5ca14b2fbf954b8eee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/205/30/#65-transition-and-open-effective-date-information) SEC content: no ##### [205-30-65-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-65-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:04.327Z to 2026-09-09T22:54:04.327Z Record version: sha256:e9bbf5cc0a59e1be540e356d74e19e7c6fe1dbee9e65f4acb64f0c4d34fab42f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 01/05/2016 after the end of the transition period stated in Accounting Standards Update No. 2013-07, _Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting_.