# ASC 420-10-40: Exit or Disposal Cost Obligations — Overall — 40 Derecognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/420/10/#40-derecognition)

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## ASC 420-10-40: 40 Derecognition

[Read section](https://asc.understandingaccounting.org/asc/420/10/#40-derecognition)

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#### Reversal of Liability

##### [420-10-40-1](https://asc.understandingaccounting.org/asc/420/10/#420-10-40-1)

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If an event or circumstance occurs that discharges or removes an entity's responsibility to settle a liability for a cost associated with an exit or disposal activity recognized in a prior period, the liability shall be reversed. The related costs shall be reversed through the same line item(s) in the income statement (statement of activities) used when those costs were recognized initially.