# ASC 960-40-25: Plan Accounting—Defined Benefit Pension Plans — Terminating Plans — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/960/40/#25-recognition)

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## ASC 960-40-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/960/40/#25-recognition)

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##### [960-40-25-1](https://asc.understandingaccounting.org/asc/960/40/#960-40-25-1)

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If [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.") of a plan is deemed to be imminent (as defined in paragraph [205-30-25-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-2)) before the end of the plan year, the plan's year-end financial statements shall be prepared using the liquidation basis of accounting in accordance with Subtopic 205-30.

##### [960-40-25-2](https://asc.understandingaccounting.org/asc/960/40/#960-40-25-2)

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Plan financial statements for periods ending after the determination that liquidation is imminent are prepared using the liquidation basis of accounting.