1.3 Scope of ASC 360-10 — Impairment or Disposal of Long-Lived Assets

05-4 The Impairment or Disposal of Long-Lived Assets Subsections provide guidance for:

1. Recognition and measurement of the impairment of long-lived assets to be held and used
2. Measurement of long-lived assets to be disposed of by sale
3. Disclosures about the impairment or disposal of long-lived assets and disposals of individually significant components of an entity.

05-5 For long-lived assets disposed of or classified as held for sale, different presentation and disclosures are required depending on the nature of the disposal. If the long-lived assets are a significant component of an entity, more extensive disclosures are required. Additionally, if the component of an entity meets the definition of discontinued operation in paragraph 205-20-45-1B, an entity shall refer to Subtopic 205-20 for the presentation and disclosure requirements for discontinued operations (see the flowchart in paragraph 360-10-55-18A for an illustration).

15-4 The guidance in the Impairment or Disposal of Long-Lived Assets Subsections applies to the following transactions and activities:

1. Except as indicated in (b) and the following paragraph, all of the transactions and activities related to recognized long-lived assets of an entity to be held and used or to be disposed of, including:
   1. Right-of-use assets of lessees
   2. Long-lived assets of lessors subject to operating leases
   3. Proved oil and gas properties that are being accounted for using the successful-efforts method of accounting
   4. Long-term prepaid assets.
2. The following transactions and activities related to assets and liabilities that are considered part of an asset group or a disposal group:
   1. If a long-lived asset (or assets) is part of a group that includes other assets and liabilities not covered by the Impairment or Disposal of Long-Lived Assets Subsections, the guidance in the Impairment or Disposal of Long-Lived Assets Subsections applies to the group. In those situations, the unit of accounting for the long-lived asset is its group. For a long-lived asset or assets to be held and used, that group is referred to as an asset group. For a long-lived asset or assets to be disposed of by sale or otherwise, that group is referred to as a disposal group. Examples of liabilities included in a disposal group are legal obligations that transfer with a long-lived asset, such as certain environmental obligations, and obligations that, for business reasons, a potential buyer would prefer to settle when assumed as part of a group, such as warranty obligations that relate to an acquired customer base.
   2. The guidance in the Impairment or Disposal of Long-Lived Assets Subsections does not change generally accepted accounting principles (GAAP) applicable to those other individual assets (such as accounts receivable and inventory) and liabilities (such as accounts payable, long-term debt, and asset retirement obligations) not covered by the Impairment or Disposal of Long-Lived Assets Subsections that are included in such groups.

15-5 The guidance in the Impairment or Disposal of Long-Lived Assets Subsections does not apply to the following transactions and activities:

1. Goodwill
2. Intangible assets not being amortized that are to be held and used
3. Servicing assets
4. Financial instruments, including investments in equity securities accounted for under the cost or equity method
5. Deferred policy acquisition costs
6. Deferred tax assets
7. Unproved oil and gas properties that are being accounted for using the successful-efforts method of accounting
8. Oil and gas properties that are accounted for using the full-cost method of accounting as prescribed by the Securities and Exchange Commission (SEC) (see Regulation S-X, Rule 4-10, Financial Accounting and Reporting for Oil and Gas Producing Activities Pursuant to the Federal Securities Laws and the Energy Policy and Conservation Act of 1975)
9. Certain other long-lived assets for which the accounting is prescribed elsewhere in the standards:
   1. For guidance on financial reporting in the record and music industry, see Topic 928.
   2. For guidance on financial reporting in the broadcasting industry, see Topic 920.
   3. For guidance on accounting for the costs of computer software to be sold, leased, or otherwise marketed, see Subtopic 985-20.
   4. For guidance on accounting for abandonments and disallowances of plant costs for regulated entities, see Subtopic 980-360.

15-6 Entities that hold collections shall follow the accounting and disclosure requirements in Subtopic 958-360 on not-for-profit entities — property, plant, and equipment.