{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/275/912/#50-disclosure","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"275","topic_title":"Risks and Uncertainties","subtopic":"275-912","subtopic_title":"Contractors—Federal Government","section":{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"275-912-50-1","para":"50-1","html":"
Paragraph superseded by Accounting Standards Update No. 2014-09.
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In some circumstances it will be impossible to make a reasonable estimate of a termination claim in time for inclusion in the financial statements of the period in which the termination occurs. Effect may then be given in the statements to those parts of the termination claim that are determinable with reasonable certainty and disclosure made, by note or otherwise, of the status of the remainder.
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If the contractor's claim includes items of known controversial nature it shall be stated at the amount estimated to be collectible. If a particular termination claim or part thereof is so uncertain in amount that it cannot be reasonably estimated, it is preferable not to give effect to that part of the claim in the financial statements. If the total of such undeterminable elements is material, the circumstances shall be disclosed in statements issued or available to be issued (as discussed in Section 855-10-25) before the removal of the uncertainty. In an extreme circumstance involving undeterminable claims, consideration shall be given to delaying the issuance of financial statements until necessary data are available.
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The effect of a contract termination shall be reflected in the financial statements of the contractor in the period in which the termination occurs, or earlier if the termination is a subsequent event occurring before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) and attributable to conditions that existed at the date of the balance sheet. If sufficient information is not available to predict the effect of a very recent termination, then the best information available shall be disclosed in the notes to financial statements in conformity with Topic 450. The effective date of termination shall be the date at which the contractor acquires the right to receive payment on the terminated portion of the contract.
","snippet":"The effect of a contract termination shall be reflected in the financial statements of the contractor in the period in which the termination occurs, or earlier if the termination is a subsequent event occurring before th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6791a3ef1c1d7bb3eb13cdd87c57e1725b994df6602c24ae581d90da7e48cd9e","downloaded_from":"2026-09-09T23:22:29.312Z","last_downloaded_at":"2026-09-09T23:22:29.312Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479072","source_sha256":"320352489e8e1278997b06324486d707c80288c5898b1fe2bdc52c0ec2afb2f4"}},{"citation":"275-912-50-5","para":"50-5","html":"
Significant items of a known controversial nature also shall be disclosed in the notes to financial statements, although estimates of ultimate amounts to be realized may not be determinable.
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The government contractor is subject to a degree of risk different from its commercial counterpart because of the unilateral contract right of the government to terminate a contract. If there are indications that a contract termination may occur and the termination would have a material effect on the contractor's operations, disclosure of the circumstances and the potential effects shall be made in the notes to financial statements. Indicators of a potential contract termination include notice of a possible termination, contract performance problems, procurement cutbacks, and so forth.
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Paragraph 420-10-50-1 provides guidance on information about contract terminations to be disclosed in notes to financial statements.
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