# ASC 405-912: Liabilities — Contractors—Federal Government Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/405/912/) 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): 2026-09-10T00:16:17.263Z to 2026-09-10T00:16:37.609Z Record version: sha256:7bfe9de6a52d2707e7286ed9d6bef51f8780241fca3b0a6b71bc18b7df96c487 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-912: Liabilities — Contractors—Federal Government ### Machine-generated study aids ```json { "summary": "ASC 405-912 tells federal government contractors how to present and disclose liabilities arising from terminated contracts and from progress/advance payments. Termination loans (even if government-guaranteed) are third-party liabilities shown as current liabilities with cross-reference to the related claim; unliquidated advance payments on a terminated contract are deducted from the claim receivable. Progress and advance payments accounted for as borrowings under 912-310-25-7 are reported as cash received from financing activities.", "key_points": [ "The Subtopic addresses liabilities from subcontractors' claims on cost-plus-fixed-fee contracts and from progress payments (405-912-05-1), and follows the scope of Subtopic 912-10 (405-912-15-1).", "Whether progress payments received are accounted for as a financing transaction is determined under paragraph 912-310-25-7 (405-912-25-3).", "Loans negotiated on the security of a termination claim are presented as current liabilities (405-912-45-3).", "Termination loans are liabilities to third parties even when guaranteed in whole or in part by the government, and are presented as balance sheet liabilities cross-referenced to the related claim (405-912-45-4).", "Advance payments previously received on a terminated contract are reflected as deductions from the claim receivable in statements issued before final collection (405-912-45-5).", "Progress and advance payments accounted for as borrowings are reported as cash received from financing activities (405-912-45-7).", "Disclosure is required of the relationship of advance payment or guaranteed loan liabilities to a possible termination claim receivable (405-912-50-2) and of subcontractors' claims whose amounts are not reasonably determinable (405-912-50-3)." ], "categories": [ "Presentation", "Disclosure", "Cash flows", "Industry-specific" ], "audience_level": "intermediate", "student_note": "Most of the old recognition and classification guidance here was superseded by ASU 2014-09 (ASC 606), so what remains is essentially balance sheet presentation, cash flow classification, and disclosure. The common trap is assuming a government guarantee makes a termination loan something other than a liability, or netting the loan against the claim receivable — only prior advance payments are deducted from the claim.", "related_topics": [ "912-310", "912-10", "606", "912-605", "230", "405-20" ], "key_concepts": [ "termination claim", "termination loans", "advance payments", "progress payments as financing", "cost-plus-fixed-fee contract", "subcontractors' claims", "government contractor", "financing activities" ] } ``` Source downloaded (UTC): 2026-09-10T00:16:17.263Z to 2026-09-10T00:16:17.263Z Record version: sha256:d16c3893e1f9e570a735822a0628d6a6b772050ae8c16ad313a00d034035dd22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-912-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/405/912/#00-status) SEC content: no ##### [405-912-00-1](https://asc.understandingaccounting.org/asc/405/912/#405-912-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:17.263Z to 2026-09-10T00:16:17.263Z Record version: sha256:3479d1c00d43a7054346ced66f5931e5135149746cf10239ee88ad01207bdfb2 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
912-405-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
912-405-25-1SupersededAccounting Standards Update No. 2014-0905/28/2014
912-405-25-2SupersededAccounting Standards Update No. 2014-0905/28/2014
912-405-45-1SupersededAccounting Standards Update No. 2014-0905/28/2014
912-405-45-2SupersededAccounting Standards Update No. 2014-0905/28/2014
912-405-45-6SupersededAccounting Standards Update No. 2014-0905/28/2014
912-405-50-1SupersededAccounting Standards Update No. 2014-0905/28/2014
912-405-50-2AmendedMaintenance Update 2016-11 (PDF)06/27/2016
912-405-50-3AmendedMaintenance Update 2016-11 (PDF)06/27/2016
Source downloaded (UTC): 2026-09-10T00:16:19.836Z to 2026-09-10T00:16:19.836Z Record version: sha256:dc725013349b1df9e9f7d5db7c906244600bec70ca6eca5dbeb7fe905265dab6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-912-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/405/912/#05-overview-and-background) SEC content: no ##### [405-912-05-1](https://asc.understandingaccounting.org/asc/405/912/#405-912-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:19.836Z to 2026-09-10T00:16:19.836Z Record version: sha256:a7f33c56bbc5aef84a241cd6cf950c6469c1416c37e3ecb6eec167fbceff0bf8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance to government contractors on accounting for liabilities associated with claims of subcontractors on [cost-plus-fixed-fee contracts](https://asc.understandingaccounting.org/glossary/c/#cost-plus-fixed-fee-contract "A contract under which the contractor is reimbursed for costs plus the provision for a fixed fee.") and progress payments. Source downloaded (UTC): 2026-09-10T00:16:23.843Z to 2026-09-10T00:16:23.843Z Record version: sha256:ca7c804f379340b4fdf6668924cbdcc63e1a556792a1497275b597887e1edf33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-912-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/405/912/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [405-912-15-1](https://asc.understandingaccounting.org/asc/405/912/#405-912-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:23.843Z to 2026-09-10T00:16:23.843Z Record version: sha256:62032086ad6870499f28f8292452a7007b244f3dcfa70ce69cc8e3450a78c26c 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): 2026-09-10T00:16:29.229Z to 2026-09-10T00:16:29.229Z Record version: sha256:be3c65dccdce90bd29a4e13b6c8c037e7e8ff2dfd872b0c3c1a8ced12d3e6d36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-912-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/405/912/#25-recognition) SEC content: no ##### [405-912-25-1](https://asc.understandingaccounting.org/asc/405/912/#405-912-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:29.229Z to 2026-09-10T00:16:29.229Z Record version: sha256:6df33341be533b9a4a19171da1815a021c7ce24d8d1aecdf56b83eb593f5bab9 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/). ##### [405-912-25-2](https://asc.understandingaccounting.org/asc/405/912/#405-912-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:29.229Z to 2026-09-10T00:16:29.229Z Record version: sha256:f5095deb8c15edef9e8e5495df0b218960dd5ab8abd7657977356e44a1bd30f4 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/). #### Progress Payments ##### [405-912-25-3](https://asc.understandingaccounting.org/asc/405/912/#405-912-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:29.229Z to 2026-09-10T00:16:29.229Z Record version: sha256:c9e0643f0c1b3d7b762fb79b15c5bc73a52ea7c4df6e10f1dcdec9121e55cf8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [912-310-25-7](https://asc.understandingaccounting.org/asc/310/912/#310-912-25-7) provides guidance on the circumstances in which progress payments received shall be accounted for as a financing transaction. Source downloaded (UTC): 2026-09-10T00:16:31.923Z to 2026-09-10T00:16:31.923Z Record version: sha256:13ecd38dda51757b4e03c21f497662f632536241a41d98ce651c3abfc4afcdf8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-912-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/405/912/#45-other-presentation-matters) SEC content: no ##### [405-912-45-1](https://asc.understandingaccounting.org/asc/405/912/#405-912-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:31.923Z to 2026-09-10T00:16:31.923Z Record version: sha256:4459dd799c6ba1ddf5c3c40b8c4b3fce2a35c4cb4a7495398a832a3c32eb0ecd 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/). ##### [405-912-45-2](https://asc.understandingaccounting.org/asc/405/912/#405-912-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:31.923Z to 2026-09-10T00:16:31.923Z Record version: sha256:05c8452742351510dc361ca6a6de79408ca38a44cae820a299eff5d88d95d945 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/). #### Balance Sheet ##### [405-912-45-3](https://asc.understandingaccounting.org/asc/405/912/#405-912-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:31.923Z to 2026-09-10T00:16:31.923Z Record version: sha256:ece33863e4b8ea8d9463c3c873c881e2f6aec0bb7afb88a9f88c1258cf043b8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Loans negotiated on the security of the termination claim shall be shown as current liabilities. ##### [405-912-45-4](https://asc.understandingaccounting.org/asc/405/912/#405-912-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:31.923Z to 2026-09-10T00:16:31.923Z Record version: sha256:4a14bb7df2752bed9236a7a13a9cefaba2236df1ef67229012f25bbb6a6d1278 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Termination loans are liabilities to third parties, even though guaranteed in whole or in part by the government, and shall be presented in the balance sheet as liabilities, with appropriate cross-reference to the related claim or claims. ##### [405-912-45-5](https://asc.understandingaccounting.org/asc/405/912/#405-912-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:31.923Z to 2026-09-10T00:16:31.923Z Record version: sha256:7957ae42184833dcad86ad0ddc47bbd119466856ad79730e6523a6d3f9695256 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a terminated contract is one on which [advance payments](https://asc.understandingaccounting.org/glossary/a/#advance-payments "Government advances of cash as a revolving fund or against the final payment due under an agreement.") had previously been received, the financial statements of the contractor issued before final collection of the claim shall reflect any balance of those advances as deductions from the claim receivable. ##### [405-912-45-6](https://asc.understandingaccounting.org/asc/405/912/#405-912-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:31.923Z to 2026-09-10T00:16:31.923Z Record version: sha256:1f9a2ad076a79736cfbd7357bdc5756e70c972dc497711fbf5d4a12756e17dc4 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/). #### Cash Flow Statement—Progress and Advance Payments ##### [405-912-45-7](https://asc.understandingaccounting.org/asc/405/912/#405-912-45-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:31.923Z to 2026-09-10T00:16:31.923Z Record version: sha256:195316c6b64541703c9feab2c17a6a216218729f0dc52b5a077d7733044d3da2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If progress and advance payments are accounted for as borrowings, such amounts shall be reported as cash received from financing activities. Source downloaded (UTC): 2026-09-10T00:16:35.093Z to 2026-09-10T00:16:35.093Z Record version: sha256:a506b52650ee99f3e8a473f5086b19cc61e29c07113d495873d0f7106690de21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-912-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/405/912/#50-disclosure) SEC content: no ##### [405-912-50-1](https://asc.understandingaccounting.org/asc/405/912/#405-912-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:35.093Z to 2026-09-10T00:16:35.093Z Record version: sha256:7febb119ae53bfc0769a2fb27de30188d21d65d144dfb4cf62de3da00f21ae18 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 ##### [405-912-50-2](https://asc.understandingaccounting.org/asc/405/912/#405-912-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:35.093Z to 2026-09-10T00:16:35.093Z Record version: sha256:c65798a0ba9473ca03d60ecd7532595aedd410bfc19de0589cbd4ad8fd9c6790 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial statements issued before the termination claim is recorded shall disclose, by note or otherwise, the relationship of advance payment or guaranteed loan liabilities to a possible termination claim receivable. ##### [405-912-50-3](https://asc.understandingaccounting.org/asc/405/912/#405-912-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:16:35.093Z to 2026-09-10T00:16:35.093Z Record version: sha256:70fdd534be048513071bc2b4271cf0a54a2524efa285652cc099b04b209688c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To the extent that the amounts of subcontractors' claims are not reasonably determinable, disclosure shall be made by note or otherwise in the financial statements.