USA Contract Fees at Termination

[zmanfornow]

I have an operating agreement with a company which toll manufactures for me which calls for a lump sum payment ($100K) upon termination. It is not an early termination fee but merely intended to assist with employee costs and building rehab after I cease business with the company. I gave a one year notice this month so the fee is payable upon exit in one year. When do I recognize the expense?

 

[kirby]

SFAS 146 says you recognize the expense now and record it at the present value today of the $100k. Then monthly record the difference between the $100k and the pv using an amortization method