Summary of Statement No. 74

Accounting for Special Termination Benefits Paid to Employees (Issued 8/83)


This Statement applies when an employer offers for a short period of time special termination benefits to its employees. The employer is to recognize special termination benefits as a liability and an expense when the employees accept the offer and the amount can be reasonably estimated. The amount to be recognized includes any lump-sum payments and the present value of any expected future payments. If reliably measurable, certain changes in the estimated costs of other employee benefits are also to be included in measuring the expense.

This Statement applies for special termination benefits offered after June 30, 1983, with earlier application encouraged. Restatement of previously issued financial statements is permitted.