# ASC 420-10-15: Exit or Disposal Cost Obligations — Overall — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/420/10/#15-scope-and-scope-exceptions) 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): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:b57ec22c699dae19516546950073477db4d2aeaaf9998f4aee3487fdf7df46e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 420-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/420/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [420-10-15-1](https://asc.understandingaccounting.org/asc/420/10/#420-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:ecc633a1ea614246571fbfef5505f5617ed0f2dd54c1a1c7e132c190e9a8726d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for the Exit or Disposal Cost Obligations Topic. #### Entities ##### [420-10-15-2](https://asc.understandingaccounting.org/asc/420/10/#420-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:2bfb417310eded0a396401116488082269a64dd80411ba932c2bf4b1129bb3af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Exit or Disposal Cost Obligations Topic applies to all entities. #### Transactions ##### [420-10-15-3](https://asc.understandingaccounting.org/asc/420/10/#420-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:83833cf13ec855d09f7bf7e22ffb29e1072ee97669e6bece16016998ed83bfc1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/o/#one-time-employee-termination-benefits "Benefits provided to current employees that are involuntarily terminated under the terms of a one-time benefit arrangement.")) 2. b Costs to terminate a contract that is not a [lease](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") (see paragraphs [420-10-25-11 through 25-13](https://asc.understandingaccounting.org/asc/420/10/#420-10-25-11) for further description of contract termination costs and paragraph [842-20-40-1](https://asc.understandingaccounting.org/asc/842/20/#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](https://asc.understandingaccounting.org/glossary/a/#acquisition-by-a-not-for-profit-entity "A transaction or other event in which a not-for-profit acquirer obtains control of one or more nonprofit activities or businesses and initially recognizes their assets and liabilities in the acquirer's financial statements. When applicable guidance in Topic 805 is applied by a not-for-profit entity, the term business combination has the same meaning as this term has for a for-profit entity. Likewise, a reference to business combinations in guidance that links to Topic 805 has the same meaning as a reference to acquisitions by not-for-profit entities."). ##### [420-10-15-4](https://asc.understandingaccounting.org/asc/420/10/#420-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:140598af5b5792518de527cf6eb546f513113524b45b299ed51300262e087e0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An exit activity includes but is not limited to a [restructuring](https://asc.understandingaccounting.org/glossary/r/#restructuring "A program that is planned and controlled by management, and materially changes either the scope of a business undertaken by an entity, or the manner in which that business is conducted, as defined by the International Accounting Standard No. 37 in 2002."), 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. ##### [420-10-15-5](https://asc.understandingaccounting.org/asc/420/10/#420-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:fdd4d90fa3ae5da8cf89e10dfd3f485affcd43ae83141a70ffa0216717894ebe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Other Considerations ##### [420-10-15-6](https://asc.understandingaccounting.org/asc/420/10/#420-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:70015cdff11b597f668a8c5324e1a7513db0d36c1b21db2b70243fe1f0d6742d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/712/10/#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. ##### [420-10-15-7](https://asc.understandingaccounting.org/asc/420/10/#420-10-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:e005e2688e1f7b63f74de769a433ed99d8e84e41982ff2f8d68b74c3eaf79fa4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [420-10-55-1](https://asc.understandingaccounting.org/asc/420/10/#420-10-55-1) and Example 5 (paragraph [420-10-55-16](https://asc.understandingaccounting.org/asc/420/10/#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. ##### [420-10-15-8](https://asc.understandingaccounting.org/asc/420/10/#420-10-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:37.535Z to 2026-09-10T00:22:37.535Z Record version: sha256:52d4067cb9732611ed5fe1fa95ac4ce2e2c48271e2a2ab81dbea25782fe81f6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a plan of termination that meets the criteria in paragraph [420-10-25-4](https://asc.understandingaccounting.org/asc/420/10/#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](https://asc.understandingaccounting.org/asc/712/10/#712-10-25-1) will apply to the incremental voluntary termination benefits (the excess of the voluntary termination benefit amount over the involuntary termination benefit amount).