An entity shall remove a financial liability ( or part of a financial liability) from its balance sheet when it is extinguished - i.e., when the obligation specified in the contract is discharged or cancelled or expired. A financial liability (or part of it) is extinguished when the debtor either: discharges the liability (or part of it) by paying the creditor, normally with cash, other financial assets, goods or services; or is legally released from primary responsibility for the liability (or part of it) either by process of law or by the creditor. Conclusion : The debt does not die along side the creditor You are still beholden to the terms of your debt, and failing to pay the money back to the estate can lead to legal consequences, just as it would if the deceased person was still alive.Hence, In the given case mare death of Mr.Barnes does not provide valid grounds for the company to derecognise the liability, Everspring Corp should check all the possible ways to discharge its liability and Board should apply the professional judgement while derecognising the liabilities. Where do you find this information in the FASB Codification?