{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/340/10/#25-recognition","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":"340","topic_title":"Other Assets and Deferred Costs","subtopic":"340-10","subtopic_title":"Overall","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Preproduction Costs Related to Long-Term Supply Arrangements","paragraphs":[{"citation":"340-10-25-1","para":"25-1","html":"
Design and development costs for products to be sold under long-term supply arrangements shall be expensed as incurred. Design and development costs for molds, dies, and other tools that a supplier will own and that will be used in producing the products under a long-term supply arrangement shall be capitalized as part of the molds, dies, and other tools (subject to an impairment assessment under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10) unless the design and development is for molds, dies, and other tools involving new technology, in which case, the costs shall be expensed as incurred in accordance with Subtopic 730-10.
","snippet":"Design and development costs for products to be sold under long-term supply arrangements shall be expensed as incurred. Design and development costs for molds, dies, and other tools that a supplier will own and that will…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ee85a5ecb6b74c2763ef011902f9e34066a3888f95beb135afe6de6ea27feb24","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}},{"citation":"340-10-25-2","para":"25-2","html":"
Design and development costs for molds, dies, and other tools that a supplier will not own and that will be used in producing the products under the long-term supply arrangement shall be capitalized (subject to an impairment assessment under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10) if the supply arrangement provides the supplier the noncancelable right (as long as the supplier is performing under the terms of the supply arrangement) to use the molds, dies, and other tools during the supply arrangement. Otherwise, those design and development costs shall be expensed as incurred, including costs incurred prior to the supplier's receiving the noncancelable right to use the molds, dies, and other tools during the supply arrangement.
","snippet":"Design and development costs for molds, dies, and other tools that a supplier will not own and that will be used in producing the products under the long-term supply arrangement shall be capitalized (subject to an impair…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:220ab825452b33bc775aec054ddd62a0de97f625a60d365e38bac9b5fd27934c","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}},{"citation":"340-10-25-3","para":"25-3","html":"
If a contractual guarantee for reimbursement exists for design and development costs that otherwise would be expensed based on the guidance in this Section, those costs shall be recognized as an asset as incurred. For purposes of this Subtopic, contractual guarantee means a legally enforceable agreement in which the amount of reimbursement can be objectively measured and verified.
","snippet":"If a contractual guarantee for reimbursement exists for design and development costs that otherwise would be expensed based on the guidance in this Section, those costs shall be recognized as an asset as incurred. For pu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a46705b1b5528201cae8edea3669b4a06fb6685adac672070141d43dc3e42a09","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}},{"citation":"340-10-25-4","para":"25-4","html":"
See Examples 1 through 4 (paragraphs
340-10-55-2 through 55-5
) for preproduction costs related to long-term supply arrangements.
","snippet":"See Examples 1 through 4 (paragraphs 340-10-55-2 through 55-5) for preproduction costs related to long-term supply arrangements.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ce602046578f390700ea45c521e35205f995c5232a06d2e755e314e32c664b8a","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b178fa0806444ee9157675ec5be0e62d5352347f602bf767322a999138eee31f","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}},{"block":null,"heading":"Planned Major Maintenance Activities","paragraphs":[{"citation":"340-10-25-5","para":"25-5","html":"
Paragraph 360-10-25-5 states that the use of the accrue-in-advance (accrual) method of accounting for planned major maintenance activities is prohibited in annual and interim financial reporting periods.
","snippet":"Paragraph 360-10-25-5 states that the use of the accrue-in-advance (accrual) method of accounting for planned major maintenance activities is prohibited in annual and interim financial reporting periods.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:60ffb6e9b2c8a525a5c4af58fd9f1a2d38c64b968b2218b64b5990df291e6919","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d95704f2e354de2057119cb27eb58f941262b1c576689fdf540ae3f374023553","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6906efd262ef7aee64ac270d0f52ddbeac4f4732decc79c96d399e13bb28e46d","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6906efd262ef7aee64ac270d0f52ddbeac4f4732decc79c96d399e13bb28e46d","downloaded_from":"2026-09-09T23:54:26.698Z","last_downloaded_at":"2026-09-09T23:54:26.698Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483082","source_sha256":"8842eab15ee02b1ed39d488893f1ea09d24ab14fd7516d8dd1a74e8ddfb861a2"}}