Employee Termination, Contract Termination, and Other Exit and Disposal Activities


The ASC 420 governs the transactions and activities related to Exit or Disposal Cost Obligations, (which typically relate to restructuring-type activities). The objective of ASC 420 is to improve financial reporting by requiring that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred.

This course provides an overview of the authoritative guidance prescribed by Accounting Standards Codification (ASC) Topic No. 420, Exit or Disposal Cost Obligations. The discussion related to ASC Topic No. 420 focuses primarily on costs associated with exit or disposal activities, including one-time involuntary termination benefits as well as certain contract termination costs and other associated costs. In addition, the respective presentation and disclosure requirements will be addressed.

Learning Objectives

Upon completion of this course, students will be able to:

  • identify transactions within the scope of ASC Topic No. 420 
  • identify recognition and measurement requirements relating to one-time termination benefits 
  • recognize accounting requirements relating to contract termination and other associated costs 
  • identify presentation and disclosure requirements relating to exit or disposal activities

Designed For

Practicing CPAs, both in public accounting and business and industry -- controllers, accountants, and other financial accounting personnel 

Advanced Preparation


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