# ASC 330-912-25: Inventory — Contractors—Federal Government — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/330/912/#25-recognition)

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## ASC 330-912-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/330/912/#25-recognition)

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#### Termination Claims

##### [330-912-25-1](https://asc.understandingaccounting.org/asc/330/912/#330-912-25-1)

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If inventory items whose costs are included in the termination claim are subsequently reacquired by the contractor the reacquisition value of those items shall be recorded as a purchase and applied in accordance with the guidance in paragraph [912-310-35-1](https://asc.understandingaccounting.org/asc/310/912/#310-912-35-1).

##### [330-912-25-2](https://asc.understandingaccounting.org/asc/330/912/#330-912-25-2)

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So called no-cost settlements—those in which the contractor waives the right to make a claim—result in no transaction that could be reflected in sales. The costs applicable to the contract shall be given their usual classification. The inventory retained shall not be treated as a purchase but shall be accounted for according to the usual methods and standards applicable to inventories.

##### [330-912-25-3](https://asc.understandingaccounting.org/asc/330/912/#330-912-25-3)

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For a discussion of inventory retained or sold to outsiders that relates to terminated contracts for the convenience of the government, see paragraphs

[912-310-25-4 through 25-5](https://asc.understandingaccounting.org/asc/310/912/#310-912-25-4)

.