# ASC 440-10-25: Commitments — Overall — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/440/10/#25-recognition)

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## ASC 440-10-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/440/10/#25-recognition)

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### Unconditional Purchase Obligations

##### [440-10-25-1](https://asc.understandingaccounting.org/asc/440/10/#440-10-25-1)

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Depending on its terms, an [unconditional purchase obligation](https://asc.understandingaccounting.org/glossary/u/#unconditional-purchase-obligation "An obligation to transfer funds in the future for fixed or minimum amounts or quantities of goods or services at fixed or minimum prices (for example, as in take-or-pay contracts or throughput contracts).") can be subject to the guidance in Topic 842, to the guidance in Topic 815, or to neither.

##### [440-10-25-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-25-2)

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The guidance in Section 842-10-15 shall be applied first to determine whether an unconditional purchase obligation is within the scope of Topic 842.

##### [440-10-25-3](https://asc.understandingaccounting.org/asc/440/10/#440-10-25-3)

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The guidance in Section 815-10-15 and paragraph [815-10-55-60](https://asc.understandingaccounting.org/asc/815/10/#815-10-55-60) shall be applied to determine whether any portion of the arrangement that is not a lease is subject to Topic 815, and the guidance in Section 815-15-15 shall be applied to determine whether any lease portion of the arrangement contains an embedded derivative that is subject to the guidance in Subtopic 815-15.

##### [440-10-25-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-25-4)

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Pursuant to paragraphs

[330-10-35-17 through 35-18](https://asc.understandingaccounting.org/asc/330/10/#330-10-35-17)

, accrued net losses on firm purchase commitments for goods for inventory shall be recognized in the accounts.