# ASC 420-10-30: Exit or Disposal Cost Obligations — Overall — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/420/10/#30-initial-measurement) 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): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:2a7862beee21d738821796e3f6f703dccb5d7260076fd8b00e781f81fc976234 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 420-10-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/420/10/#30-initial-measurement) SEC content: no #### Fair Value ##### [420-10-30-1](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:0d6c1abb33dd858951109bd5845add303501c26afca48d9c64382f0b4dc7c5bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A liability for a cost associated with an exit or disposal activity shall be measured initially at its fair value in the period in which the liability is incurred, except as indicated in paragraphs [420-10-30-4](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-4) and [420-10-30-6](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-6) (for a liability for one-time termination benefits that is incurred over time). ##### [420-10-30-2](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:eb197d133e595eac34c2808023b74251a0367d71a95b4949d4c98edd4b557742 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Quoted market prices are the best representation of fair value. However, for many of the liabilities covered by this Subtopic, quoted market prices will not be available. Consequently, in those circumstances, fair value will be estimated using some other valuation technique. A present value technique is often the best available valuation technique with which to estimate the fair value of a liability for a cost associated with an exit or disposal activity. For a liability that has uncertainties both in timing and amount, an expected present value technique generally will be the appropriate technique. ##### [420-10-30-3](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:32d480bb367e67ffddd1ca98bcc5abe6beec67a917207b04b6f46a0d1040cb63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some situations, a fair value measurement for a liability associated with an exit or disposal activity obtained using a valuation technique other than a present value technique may not be materially different from a fair value measurement obtained using a present value technique. In those situations, this Subtopic does not preclude the use of estimates and computational shortcuts that are consistent with a fair value measurement objective. #### One-Time Employee Termination Benefits ##### [420-10-30-4](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:34cc94720c4fcf5e47a8223619200752ceab20ebdff7a3f1757bf0e5ded0ea50 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The timing of measurement of a liability for [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.") depends on whether employees are required to render service until they are terminated in order to receive the termination benefits and, if so, whether employees will be retained to render service beyond a minimum retention period. ##### [420-10-30-5](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:83b2e6b824772869ff28473799d74b1e14e81bd519a5a05def66ebd31317907a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If employees are not required to render service until they are terminated in order to receive the termination benefits (that is, if employees are entitled to receive the termination benefits regardless of when they leave) or if employees will not be retained to render service beyond the minimum retention period, a liability for the termination benefits shall be measured at its fair value at the [communication date](https://asc.understandingaccounting.org/glossary/c/#communication-date "The date the plan of termination for one-time employee termination benefits meets all of the criteria in paragraph 420-10-25-4 and has been communicated to employees."). Example 1 (paragraph [420-10-55-2](https://asc.understandingaccounting.org/asc/420/10/#420-10-55-2)) illustrates the application of this paragraph. ##### [420-10-30-6](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:0ba7773a52a3dad4cd9bb42e86bcffcb82e64a424d2cd48f1b8a7140e0e468c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If employees are required to render service until they are terminated in order to receive the termination benefits and will be retained to render service beyond the minimum retention period, a liability for the termination benefits shall be measured initially at the communication date based on the fair value of the liability as of the termination date. For an illustration of this situation, see Example 2 (paragraph [420-10-55-4](https://asc.understandingaccounting.org/asc/420/10/#420-10-55-4)). #### Contract Termination Costs ##### [420-10-30-7](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:07d82c8b50aa5697fd918bd7b02549df09bc3de7d62e6d66e68a436c051c16ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A liability for costs to terminate a contract before the end of its term shall be measured at its fair value when the entity terminates the contract in accordance with the contract terms (for example, when the entity gives written notice to the counterparty within the notification period specified by the contract or has otherwise negotiated a termination with the counterparty). ##### [420-10-30-8](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:3b6b5afbad5a3f13d7e50935e72069d220f6a6d069c3aa452e2e3cbb81852458 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [420-10-30-9](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:26ae04dfc49a226bc201042888afeda32591d1fe98c43467d1b6296345fb3c1d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A liability for costs that will continue to be incurred under a contract for its remaining term without economic benefit to the entity shall be measured at its fair value at the cease-use date. #### Other Associated Costs ##### [420-10-30-10](https://asc.understandingaccounting.org/asc/420/10/#420-10-30-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:22:47.749Z to 2026-09-10T00:22:47.749Z Record version: sha256:6db243c4fba358637fcd9f6e295bd2447bfaee2eb8541eb00bde162c5efca047 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A liability for other costs associated with an exit or disposal activity shall be measured at its fair value in the period in which the liability is incurred (generally, when goods or services associated with the activity are received).