{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/420/10/#15-scope-and-scope-exceptions","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":"420","topic_title":"Exit or Disposal Cost Obligations","subtopic":"420-10","subtopic_title":"Overall","section":{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"420-10-15-1","para":"15-1","html":"
The Scope Section of the Overall Subtopic establishes the pervasive scope for the Exit or Disposal Cost Obligations Topic.
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The guidance in the Exit or Disposal Cost Obligations Topic applies to all entities.
","snippet":"The guidance in the Exit or Disposal Cost Obligations Topic applies to all entities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2bfb417310eded0a396401116488082269a64dd80411ba932c2bf4b1129bb3af","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:96e62dadf43ceecbbde6dd6f750493fb543c1382007c5505779712376b215410","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"420-10-15-3","para":"15-3","html":"
The guidance in the Exit or Disposal Cost Obligations Topic applies to the following transactions and activities:
  1. a
    Termination benefits provided to current employees that are involuntarily terminated under the terms of a benefit arrangement that, in substance, is not an ongoing benefit arrangement or an individual deferred compensation contract (referred to as one-time employee termination benefits)
  2. b
    Costs to terminate a contract that is not a lease (see paragraphs
    420-10-25-11 through 25-13
    for further description of contract termination costs and paragraph 842-20-40-1 for terminations of a lease)
  3. c
    Costs to consolidate facilities or relocate employees
  4. d
    Costs associated with a disposal activity covered by Subtopic 205-20
  5. e
    Costs associated with an exit activity, including exit activities associated with an entity newly acquired in a business combination or an acquisition by a not-for-profit entity.
","snippet":"The guidance in the Exit or Disposal Cost Obligations Topic applies to the following transactions and activities:\n(a) Termination benefits provided to current employees that are involuntarily terminated under the terms o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:83833cf13ec855d09f7bf7e22ffb29e1072ee97669e6bece16016998ed83bfc1","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}},{"citation":"420-10-15-4","para":"15-4","html":"
An exit activity includes but is not limited to a restructuring, such as the sale or termination of a line of business, the closure of business activities in a particular location, the relocation of business activities from one location to another, changes in management structure, and a fundamental reorganization that affects the nature and focus of operations.
","snippet":"An exit activity includes but is not limited to a restructuring, such as the sale or termination of a line of business, the closure of business activities in a particular location, the relocation of business activities f…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:140598af5b5792518de527cf6eb546f513113524b45b299ed51300262e087e0f","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}},{"citation":"420-10-15-5","para":"15-5","html":"
The guidance in this Topic does not apply to the following transactions and activities:
  1. a
    Costs associated with the retirement of a long-lived asset covered by Subtopic 410-20.
  2. b
    Impairment of an unrecognized asset while it is being used.
","snippet":"The guidance in this Topic does not apply to the following transactions and activities:\n(a) Costs associated with the retirement of a long-lived asset covered by Subtopic 410-20.\n(b) Impairment of an unrecognized asset w…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fdd4d90fa3ae5da8cf89e10dfd3f485affcd43ae83141a70ffa0216717894ebe","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5d2f40ef7b26bf6b4efc80ad5cfd99d69d9663ef1801fd64f1fd6c026f7b5230","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}},{"block":null,"heading":"Other Considerations","paragraphs":[{"citation":"420-10-15-6","para":"15-6","html":"
Certain postemployment benefits are covered by other Topics or Subtopics. This Topic does not change the accounting for termination benefits, including one-time termination benefits granted in the form of an enhancement to an ongoing benefit arrangement, covered by the following:
  1. a
    Subtopic 715-30
  2. b
    Subtopic 715-60
  3. c
    Topic 712, which includes guidance on accounting for special or contractual termination benefits, payable before retirement and not payable from a pension or other postretirement plan, as indicated in paragraph 712-10-15-3
  4. d
    Topic 710, which includes guidance on accounting for individual deferred compensation arrangements
  5. e
    Topic 718, which addresses stock compensation plans.
","snippet":"Certain postemployment benefits are covered by other Topics or Subtopics. This Topic does not change the accounting for termination benefits, including one-time termination benefits granted in the form of an enhancement …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:70015cdff11b597f668a8c5324e1a7513db0d36c1b21db2b70243fe1f0d6742d","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}},{"citation":"420-10-15-7","para":"15-7","html":"
See paragraph 420-10-55-1 and Example 5 (paragraph 420-10-55-16) for guidance on determining whether an exit plan is a one-time termination benefit arrangement or an enhancement to an ongoing benefit arrangement as used in the preceding paragraph.
","snippet":"See paragraph 420-10-55-1 and Example 5 (paragraph 420-10-55-16) for guidance on determining whether an exit plan is a one-time termination benefit arrangement or an enhancement to an ongoing benefit arrangement as used …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e005e2688e1f7b63f74de769a433ed99d8e84e41982ff2f8d68b74c3eaf79fa4","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}},{"citation":"420-10-15-8","para":"15-8","html":"
If a plan of termination that meets the criteria in paragraph 420-10-25-4 includes both involuntary termination benefits and voluntary termination benefits, then this Topic will apply to the involuntary termination benefits and paragraphs
712-10-25-1 through 25-3
will apply to the incremental voluntary termination benefits (the excess of the voluntary termination benefit amount over the involuntary termination benefit amount).
","snippet":"If a plan of termination that meets the criteria in paragraph 420-10-25-4 includes both involuntary termination benefits and voluntary termination benefits, then this Topic will apply to the involuntary termination benef…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52d4067cb9732611ed5fe1fa95ac4ce2e2c48271e2a2ab81dbea25782fe81f6e","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:56373a547ceb54d85ed1610fa66a4bb25aff2a3aa0fbfc3c1be56fd6b9380067","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b57ec22c699dae19516546950073477db4d2aeaaf9998f4aee3487fdf7df46e5","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b57ec22c699dae19516546950073477db4d2aeaaf9998f4aee3487fdf7df46e5","downloaded_from":"2026-09-10T00:22:37.535Z","last_downloaded_at":"2026-09-10T00:22:37.535Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481748","source_sha256":"6679f884bfd17c3335c136b42f126aa6f60ca8163876909db7679e83274bc989"}}