Smith, Inc. is an online personal-shopping service and clothing retailer with a fiscal year-end of July 31, 2020. Smith, Inc. is a publicly-traded company. Due to the impact of COVID-19 Smith has decided to exit the California market and to restructure some of the corporate operations. It is not anticipated that any changes will be made to the restructuring plan.

On June 1, 2020, Smith offered 100 employees located in California the opportunity to relocate to the Chicago office as of September 1, 2020. Smith will be paying all moving/relocation costs for these employees. The employees were required to accept or decline the offer by June 30, 2020. Based upon this deadline 40 of the employees accepted the offer to relocate. Smith incurred $750,000 of relocation costs for these employees in August, 2020.

Accounting Issue: The CFO has asked you to research when Smith is required to recognize the relocation costs for this restructuring plan. He is unsure if the company should recognize/accrue for these costs in June, 2020 (when the offer was made/accepted) or in August, 2020?

GAAP Codification Reference: _______________________

Guidance: (cut and paste the guidance)

Based upon the guidance when is Smith required to recognize the relocation costs?