Accounting for Exit or Disposal Cost Obligations - What CPAs Need to Know 

Course Overview

This course provides a focused overview of the accounting for exit and disposal cost obligations under ASC 420. It covers key topics such as workforce reductions and contract terminations, with an emphasis on recognizing and measuring related liabilities. We'll also touch on the basic reporting and disclosure requirements under U.S. GAAP. 

Learning Objectives

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

• Identify the types of restructuring costs within the scope of ASC 420 

• Recognize the criteria for determining when exit and disposal cost obligations should be recorded

• Differentiate between the timing and measurement requirements for restructuring liabilities

• Recognize reporting and disclosure requirements related to restructuring costs

Introduction

Restructuring can happen for all kinds of reasons-cutting costs, shifting strategy, exiting a product line, or integrating after an acquisition. No matter the reason, these moves often come with real costs, especially when employees are let go or contracts are terminated.

This course focuses on the accounting for those types of costs under ASC 420, specifically workforce reductions and contract terminations. The guidance isn't long, but the timing rules matter and can trip people up. Just because a plan is approved or announced doesn't always mean the costs can be booked right away. Recognition depends on things like when employees are notified or when contracts are actually ended.

Revision Date: NEW 10/6/25

Additional Contents : Complete, no additional material needed
Advance Preparation : None
Intended Participants : Any CPA looking to maintain or enhance their professional competence
Course Declaration : Participants must complete the final examination within one year of purchase. A minimum passing grade of 70% or better is required to receive CPE
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