# ASC 275-912: Risks and Uncertainties — Contractors—Federal Government Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/275/912/) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:22:22.572Z to 2026-09-09T23:22:31.368Z Record version: sha256:e3dbc9cddd1fa67d9f27a399d6d47b2c60d0650af792bb8da42b89382734673c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912: Risks and Uncertainties — Contractors—Federal Government ### Machine-generated study aids ```json { "summary": "This Subtopic requires federal government contractors to make incremental disclosures about the risks and uncertainties arising from the government's unilateral right to terminate contracts for its convenience. The effect of a termination is reflected in the period the termination occurs (or earlier if it is a subsequent event attributable to balance-sheet-date conditions), with only the reasonably estimable portions of a termination claim recognized and the remainder disclosed. Controversial or undeterminable claim elements are stated at amounts estimated to be collectible or excluded and disclosed.", "key_points": [ "Effect may be given to the parts of a termination claim determinable with reasonable certainty, with note disclosure of the status of the remainder when a reasonable estimate cannot be made in time (275-912-50-2).", "Claim items of a known controversial nature shall be stated at the amount estimated to be collectible; parts too uncertain to be reasonably estimated are preferably not given effect, and if material, the circumstances shall be disclosed before the uncertainty is removed (275-912-50-3).", "In extreme circumstances involving undeterminable claims, consideration shall be given to delaying issuance of the financial statements until necessary data are available (275-912-50-3).", "A contract termination is reflected in the period it occurs, or earlier if it is a subsequent event before issuance attributable to conditions existing at the balance sheet date; the effective date of termination is when the contractor acquires the right to receive payment on the terminated portion (275-912-50-4).", "If information is insufficient to predict the effect of a very recent termination, the best available information shall be disclosed in the notes in conformity with Topic 450 (275-912-50-4).", "Significant items of a known controversial nature shall be disclosed in the notes even if ultimate amounts realizable are not determinable (275-912-50-5).", "If indicators (notice of possible termination, performance problems, procurement cutbacks) suggest a termination that would materially affect operations, the circumstances and potential effects shall be disclosed in the notes (275-912-50-6)." ], "categories": [ "Disclosure", "Contingencies and guarantees", "Industry-specific", "Presentation" ], "audience_level": "intermediate", "student_note": "Exam traps here are timing and measurement: the termination is recognized when the contractor acquires the right to payment (or earlier as a Type I subsequent event), and only reasonably estimable amounts are recorded — uncertain or controversial elements get disclosed, not accrued. Students often forget that mere indicators of a possible termination (not just an actual one) trigger disclosure if the effect would be material.", "related_topics": [ "912-10", "855-10", "450", "420-10", "275-10", "606" ], "key_concepts": [ "termination for convenience", "termination claim", "government contractor risk", "reasonable estimate", "subsequent events", "known controversial items", "note disclosure of potential termination" ] } ``` Source downloaded (UTC): 2026-09-09T23:22:22.572Z to 2026-09-09T23:22:22.572Z Record version: sha256:8aea5403d405e36fec6fa972cc8bcfc9ca82e56723c877c845a932919fcb6756 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/275/912/#00-status) SEC content: no ##### [275-912-00-1](https://asc.understandingaccounting.org/asc/275/912/#275-912-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:22.572Z to 2026-09-09T23:22:22.572Z Record version: sha256:efc8382e17c1bb0d8c0957ca65bffe18f5db523a8de9489139586ffd27f08269 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
912-275-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
912-275-50-1SupersededAccounting Standards Update No. 2014-0905/28/2014
912-275-50-2AmendedMaintenance Update 2016-11 (PDF)06/27/2016
912-275-50-4AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-09T23:22:25.275Z to 2026-09-09T23:22:25.275Z Record version: sha256:6f7f09427e5dce27edb0dd95a8732bcca5d44001ab3edd7b6eb63e17702ad17b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/275/912/#05-overview-and-background) SEC content: no ##### [275-912-05-1](https://asc.understandingaccounting.org/asc/275/912/#275-912-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:25.275Z to 2026-09-09T23:22:25.275Z Record version: sha256:917b207c3b1e37cabe45b03da0a92a68e61a6e3c6248f3befc6c7bcb6cda32be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance to government contractors related to incremental disclosures about risks and uncertainties associated with contracts terminated for the convenience of the government. Source downloaded (UTC): 2026-09-09T23:22:26.892Z to 2026-09-09T23:22:26.892Z Record version: sha256:3933b1bf2ce3394b57ecb41bccf9c1c9e3c13e8de185c7b58658c28877f1e119 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/275/912/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [275-912-15-1](https://asc.understandingaccounting.org/asc/275/912/#275-912-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:26.892Z to 2026-09-09T23:22:26.892Z Record version: sha256:e1fa174f999d4edd5a44486c40af746ed55ff3b6361611cf04553b0982fe56a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 912-10-15. Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:3aac94d5ff773236ca914a658d4537d8e815d4bc245712777fee358b1fc64208 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 275-912-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/275/912/#50-disclosure) SEC content: no ##### [275-912-50-1](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:f9622f965c1a645ed39426e4c6fade8aa8c01e90a1ff824ad86ca1768f4c1c19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). #### Termination Claims ##### [275-912-50-2](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:8cf43bf1f7f4322d5523baa529f898577436772c203a3a4b594b4c5a2a3c5bdd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [275-912-50-3](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:67515c15252dc707f1d049c6bf9ba90c5e2684b992f962f5ff55c3236994e712 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [275-912-50-4](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:6791a3ef1c1d7bb3eb13cdd87c57e1725b994df6602c24ae581d90da7e48cd9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [275-912-50-5](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:ed4f5636dd20872f03da8a3fad000af18a9249650e6e2be4fd1e2e6f4b3603fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [275-912-50-6](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:544ceb592a8919a7acadabe4d1a76b4332670d095a29bd46cfd3cdadd3f068fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [275-912-50-7](https://asc.understandingaccounting.org/asc/275/912/#275-912-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:22:29.312Z to 2026-09-09T23:22:29.312Z Record version: sha256:2da2fabb2b233671f49996f659bf554ad7b51267d59f96610925699580011712 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [420-10-50-1](https://asc.understandingaccounting.org/asc/420/10/#420-10-50-1) provides guidance on information about contract terminations to be disclosed in notes to financial statements.