Exit or disposal cost obligations under US GAAP

ASC 420 establishes an accounting model for costs associated with exit or disposal activities, including restructuring activities. Under this model, a liability for costs associated with an exit or disposal activity should be recognized and initially measured at fair value only when it is incurred (i.e., when the definition of a liability in FASB Concepts Statement No. 6, Elements of Financial Statements (CON 6), is met).
It is important to distinguish between costs that are in the scope of ASC 420 and those that are not in the scope of the guidance

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