# ASC 440-10: Commitments — Overall Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/440/10/) 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): 2026-09-10T00:25:16.890Z to 2026-09-10T00:25:37.457Z Record version: sha256:d34fdf666a20332305c85d7b142e1e88738a25a51d39182d5010c5b5d0173dcc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 440-10: Commitments — Overall ### Machine-generated study aids ```json { "summary": "ASC 440-10 is the general \"Commitments\" subtopic: it requires disclosure of certain contractual commitments (unused letters of credit, pledged assets, cumulative preferred dividends in arrears, plant acquisition commitments, obligations to reduce debt, maintain working capital, or restrict dividends) that are not otherwise more explicitly addressed elsewhere in the Codification. Its Unconditional Purchase Obligations Subsections require disclosure of off-balance-sheet take-or-pay and throughput contracts that are noncancelable, were negotiated as part of arranging financing for the supplier's facility, and have a remaining term over one year. The Topic is largely a disclosure standard—recognition of such obligations is governed by other Topics (842, 815, 330).", "key_points": [ "The Topic applies to all entities and provides general commitments guidance, while commitment guidance specific to a Topic or industry resides in that Topic (440-10-05-3, 440-10-15-2).", "Unconditional purchase obligations guidance excludes product financing arrangements within Section 470-40-15 and repurchase agreements within Topic 606 paragraphs 606-10-55-66 through 55-78 (440-10-15-4).", "Sequence of analysis: apply Section 842-10-15 first to see if the obligation is a lease, then apply Sections 815-10-15 and 815-15-15 (and paragraph 815-10-55-60) to any non-lease or embedded-derivative portion (440-10-25-2 through 25-3); accrued net losses on firm inventory purchase commitments are recognized under 330-10-35-17 through 35-18 (440-10-25-4).", "Regardless of more explicit disclosures elsewhere, entities must disclose unused letters of credit, leases, pledged/mortgaged assets, pension plans, cumulative preferred dividends in arrears, and commitments for plant acquisition, debt reduction, working capital maintenance, or dividend restrictions (440-10-50-1).", "An unconditional purchase obligation triggers disclosure only if it is (a) noncancelable (or cancelable only on a remote contingency, with the other party's permission, on signing a replacement agreement, or on a penalty making continuation reasonably assured), (b) negotiated as part of arranging financing for the facilities providing the goods or services, and (c) has a remaining term exceeding one year (440-10-50-2).", "For unrecognized obligations, disclose the nature and term, the fixed and determinable amount at the latest balance sheet date in aggregate and for each of the five succeeding fiscal years, the nature of variable components, and amounts purchased for each income statement period; omission is allowed only if the aggregate undisclosed commitment is immaterial (440-10-50-4).", "If the obligation is recognized on the balance sheet, disclose the aggregate payments for each of the five years following the latest balance sheet date (440-10-50-6); disclosing imputed interest to reduce the obligation to present value is encouraged but not required, using the effective initial rate of the facility financing or, if unknown, the purchaser's incremental borrowing rate (440-10-50-5)." ], "categories": [ "Disclosure", "Contingencies and guarantees", "Recognition", "Leases" ], "audience_level": "intermediate", "student_note": "This is primarily a disclosure Topic, not a recognition Topic—the classic error is assuming an unconditional purchase obligation must be booked as a liability; instead you test it under Topic 842 first, then Topic 815, and if neither applies you only disclose. Memorize the three-part disclosure trigger in 440-10-50-2, especially the often-overlooked requirement that the obligation was negotiated as part of arranging financing for the supplier's facility.", "related_topics": [ "842", "815", "330-10", "470-40", "606", "730-20" ], "key_concepts": [ "unconditional purchase obligation", "take-or-pay contract", "throughput contract", "unused letters of credit", "cumulative preferred dividends in arrears", "five-year payment schedule", "firm purchase commitment", "off-balance-sheet financing" ] } ``` Source downloaded (UTC): 2026-09-10T00:25:16.890Z to 2026-09-10T00:25:16.890Z Record version: sha256:033ced7065561fbf109316b30e475a152f6dbaa84d9469328db79cd0b42ed1c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 440-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/440/10/#00-status) SEC content: no ##### [440-10-00-1](https://asc.understandingaccounting.org/asc/440/10/#440-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:16.890Z to 2026-09-10T00:25:16.890Z Record version: sha256:964486cc9823b3df9ba3a9316b78aeac346139dce93d22e836e604ebdedad592 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
ContractAddedAccounting Standards Update No. 2016-0202/25/2016
LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Lease PaymentsAddedAccounting Standards Update No. 2016-0202/25/2016
LesseeAddedAccounting Standards Update No. 2016-0202/25/2016
LessorAddedAccounting Standards Update No. 2016-0202/25/2016
Underlying AssetAddedAccounting Standards Update No. 2016-0202/25/2016
440-10-15-4AmendedAccounting Standards Update No. 2014-0905/28/2014
440-10-25-1AmendedAccounting Standards Update No. 2016-0202/25/2016
440-10-25-2AmendedAccounting Standards Update No. 2016-0202/25/2016
440-10-50-1AmendedAccounting Standards Update No. 2023-0610/09/2023
440-10-50-1AmendedAccounting Standards Update No. 2016-0202/25/2016
440-10-50-3AmendedAccounting Standards Update No. 2016-0202/25/2016
440-10-55-1AmendedMaintenance Update 2014-20 (PDF)09/29/2014
440-10-60-4SupersededAccounting Standards Update No. 2018-0706/20/2018
440-10-60-5SupersededAccounting Standards Update No. 2014-0905/28/2014
440-10-60-12AmendedAccounting Standards Update No. 2016-0202/25/2016
440-10-60-13AmendedAccounting Standards Update No. 2016-0202/25/2016
440-10-60-16AmendedAccounting Standards Update No. 2014-0905/28/2014
440-10-60-19SupersededAccounting Standards Update No. 2014-0905/28/2014
440-10-60-20SupersededAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T00:25:18.964Z to 2026-09-10T00:25:18.964Z Record version: sha256:979accb3da10d73c068604dc1a980f5a4fa910be612eca66dde837506f3bdda0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 440-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/440/10/#05-overview-and-background) SEC content: no ##### [440-10-05-1](https://asc.understandingaccounting.org/asc/440/10/#440-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:18.964Z to 2026-09-10T00:25:18.964Z Record version: sha256:57e2534fdb7f818511dfd1285454c8e12fdbfd0b72bb67b0445eeee2fe170a4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Commitments Topic establishes standards of financial accounting and reporting for certain commitments. This Topic contains only the Overall Subtopic. The guidance in this Subtopic is presented in the following two Subsections: 1. a General 2. b Unconditional Purchase Obligations. ##### [440-10-05-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:18.964Z to 2026-09-10T00:25:18.964Z Record version: sha256:8ef0c6f56140e96643c06ad4cbd2c87086bb3aefdc297ed762b4e23c540de556 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide guidance for unused letters of credit; preferred stock dividends in arrears; commitments such as those for plant acquisition; and obligations to reduce debts, maintain working capital, or restrict dividends. ##### [440-10-05-3](https://asc.understandingaccounting.org/asc/440/10/#440-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:18.964Z to 2026-09-10T00:25:18.964Z Record version: sha256:ebe24d1259a4c45b7da9b315218c30d329e737b27feaa30debfd13aca8728ada Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Topic provides general guidance for commitments, while other Topics include guidance for commitments that relate specifically to those Topics. In addition, commitments that are unique to a particular industry are discussed in the Topic for that industry, generally under the Commitments Subtopic. ### Unconditional Purchase Obligations ##### [440-10-05-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:18.964Z to 2026-09-10T00:25:18.964Z Record version: sha256:cf12655c09781c560b3a28a23c5dcd9b34a6176ed6359edc1e15004d5f696897 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Unconditional Purchase Obligations Subsections provide guidance for unconditional purchase obligations, including [take-or-pay](https://asc.understandingaccounting.org/glossary/t/#take-or-pay-contract "An agreement between a purchaser and a seller that provides for the purchaser to pay specified amounts periodically in return for products or services. The purchaser must make specified minimum payments even if it does not take delivery of the contracted products or services.") and [throughput contracts](https://asc.understandingaccounting.org/glossary/t/#throughput-contract "An agreement between a shipper (processor) and the owner of a transportation facility (such as an oil or natural gas pipeline or a ship) or a manufacturing facility that provides for the shipper (processor) to pay specified amounts periodically in return for the transportation (processing) of a product. The shipper (processor) is obligated to provide specified minimum quantities to be transported (processed) in each period and is required to make cash payments even if it does not provide the contracted quantities."). Source downloaded (UTC): 2026-09-10T00:25:21.962Z to 2026-09-10T00:25:21.962Z Record version: sha256:007f69d506b7974bce76f07fe821207f4e057992ffcb31e09be54d30d1aee471 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 440-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/440/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [440-10-15-1](https://asc.understandingaccounting.org/asc/440/10/#440-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:21.962Z to 2026-09-10T00:25:21.962Z Record version: sha256:6cc61d0fbf3f77d6eb715d39478d892c21c2b60fa5bbe78a6ed9d531f3f80424 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsection of the Scope Section of the Overall Subtopic establishes the pervasive scope for the Commitments Topic, with specific exceptions noted in the other Subsections of this Section. #### Entities ##### [440-10-15-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:21.962Z to 2026-09-10T00:25:21.962Z Record version: sha256:66c8b1e385e069703dd80ebb6298332ad4afc100e4e5b8eb79d62b051069be20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Commitments Topic applies to all entities. ### Unconditional Purchase Obligations #### Overall Guidance ##### [440-10-15-3](https://asc.understandingaccounting.org/asc/440/10/#440-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:21.962Z to 2026-09-10T00:25:21.962Z Record version: sha256:40ee361f35875be1c2a00d936029849d595eab01a8b7ff22849d0c668d5f353c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Unconditional Purchase Obligations Subsections apply to all entities and all [unconditional purchase obligations](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)."). #### Transactions ##### [440-10-15-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:21.962Z to 2026-09-10T00:25:21.962Z Record version: sha256:03bdb79a4347d62e5b892931b0725dbc4a7f03f6466ecaef3126851b55454c35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Unconditional Purchase Obligations Subsections does not apply to either of the following: 1. a Product financing arrangements, that are within the scope of Section 470-40-15. See paragraph [470-40-05-5](https://asc.understandingaccounting.org/asc/470/40/#470-40-05-5) for a discussion of the distinction between a product financing arrangement and an unconditional purchase obligation. 2. b Repurchase agreements that are within the scope of Topic 606, specifically in paragraphs [606-10-55-66 through 55-78](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-66) . Source downloaded (UTC): 2026-09-10T00:25:26.187Z to 2026-09-10T00:25:26.187Z Record version: sha256:ae6d6248383262b765deb13fbe3c2600222fda2f1c7d92914d745a5ae244a818 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 440-10-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/440/10/#25-recognition) SEC content: no ### Unconditional Purchase Obligations ##### [440-10-25-1](https://asc.understandingaccounting.org/asc/440/10/#440-10-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:26.187Z to 2026-09-10T00:25:26.187Z Record version: sha256:60d16daac2cc24768a243b217df1a481959ed8919eb6f6d0d4345582a6f420b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:26.187Z to 2026-09-10T00:25:26.187Z Record version: sha256:d50b25b31041f4eb38d5a44184acc8860776cd3a52ef03c0a2a3d0909ec79ea8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:26.187Z to 2026-09-10T00:25:26.187Z Record version: sha256:41a824fc66334b80590808495bb78bdcff621de0f53b11914bb3af8272febd03 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:26.187Z to 2026-09-10T00:25:26.187Z Record version: sha256:a1d7befb091e3395af845428c858a0c41f40bdf6017c3e0c9ef27d1c0c19c3cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T00:25:28.790Z to 2026-09-10T00:25:28.790Z Record version: sha256:30280e349dba6120602ac4d4a7c89cdefb4ee4fc1acab117fdcd84f644b52c3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 440-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/440/10/#50-disclosure) SEC content: no ##### [440-10-50-1](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-1) Pending content: yes Source downloaded (UTC): 2026-09-10T00:25:28.790Z to 2026-09-10T00:25:28.790Z Record version: sha256:1b3848093a2f25598caf1385f4723c2f9891cde6a98c14b849a965708cc0fb19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Notwithstanding more explicit disclosures required elsewhere in this Codification, all of the following situations shall be disclosed in financial statements: 1. a Unused letters of credit 2. b Leases (see Section 842-20-50) 3. c Assets pledged as security for loans 4. d Pension plans (see Section 715-20-50) 5. e The existence of cumulative preferred stock dividends in arrears 6. f Commitments, including: 1. 1 A commitment for plant acquisition 2. 2 An obligation to reduce debts 3. 3 An obligation to maintain working capital 4. 4 An obligation to restrict dividends. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) Notwithstanding more explicit disclosures required elsewhere in this Codification, all of the following situations shall be disclosed in financial statements: 1. a Unused letters of credit 2. b Leases (see Section 842-20-50) 3. c Assets mortgaged, pledged , or otherwise subject to lien; the approximate amounts of those assets; and the related obligations collateralized 4. d Pension plans (see Section 715-20-50) 5. e The existence of cumulative preferred stock dividends in arrears 6. f Commitments, including: 1. 1 A commitment for plant acquisition 2. 2 An obligation to reduce debts 3. 3 An obligation to maintain working capital 4. 4 An obligation to restrict dividends. ### Unconditional Purchase Obligations ##### [440-10-50-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:28.790Z to 2026-09-10T00:25:28.790Z Record version: sha256:f4123aadd8aaeea1b242b32a03f04b301b1755f398111b387183ef2abdfe5317 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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).") that has all of the following characteristics shall be disclosed in accordance with paragraph [440-10-50-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-4) (if not recorded on the purchaser's balance sheet) or in accordance with paragraph [440-10-50-6](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-6) (if recorded on the purchaser's balance sheet): 1. a It is noncancelable, or cancelable only in any of the following circumstances: 1. 1 Upon the occurrence of some remote contingency 2. 2 With the permission of the other party 3. 3 If a replacement agreement is signed between the same parties 4. 4 Upon payment of a penalty in an amount such that continuation of the agreement appears reasonably assured. 2. b It was negotiated as part of arranging financing for the facilities that will provide the contracted goods or services or for costs related to those goods or services (for example, carrying costs for contracted goods). A purchaser is not required to investigate whether a supplier used an unconditional purchase obligation to help secure financing, if the purchaser would otherwise be unaware of that fact. 3. c It has a remaining term in excess of one year ##### [440-10-50-3](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:28.790Z to 2026-09-10T00:25:28.790Z Record version: sha256:2ade0ade413837c45a3cd26be8384d48b6b8fcf3ad4b52a85d940f39c429988d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Future [lease payments](https://asc.understandingaccounting.org/glossary/l/#lease-payments "See paragraph 842-10-30-5 for what constitutes lease payments from the perspective of a lessee and a lessor.") under [leases](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") that meet the conditions in paragraph [440-10-50-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-2) need not be disclosed in accordance with paragraph [440-10-50-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-4) or paragraph [440-10-50-6](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-6) if those future lease payments are disclosed in accordance with Section 842-20-50. #### Unrecognized Commitments ##### [440-10-50-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:28.790Z to 2026-09-10T00:25:28.790Z Record version: sha256:f4ce6d9749049bc57801f6fe6dc3169f5281a2bc389ce1132aba955faa6e7a67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A purchaser shall disclose unconditional purchase obligations that meet the criteria of paragraph [440-10-50-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-2) and that have not been recognized on its balance sheet. Disclosures of similar or related unconditional purchase obligations may be combined. The disclosures shall include all of the following: 1. a The nature and term of the obligation(s) 2. b The amount of the fixed and determinable portion of the obligation(s) as of the date of the latest balance sheet presented, in the aggregate and, if determinable, for each of the five succeeding fiscal years 3. c The nature of any variable components of the obligation(s) 4. d The amounts purchased under the obligation(s) (for example, the [take-or-pay](https://asc.understandingaccounting.org/glossary/t/#take-or-pay-contract "An agreement between a purchaser and a seller that provides for the purchaser to pay specified amounts periodically in return for products or services. The purchaser must make specified minimum payments even if it does not take delivery of the contracted products or services.") or [throughput contract](https://asc.understandingaccounting.org/glossary/t/#throughput-contract "An agreement between a shipper (processor) and the owner of a transportation facility (such as an oil or natural gas pipeline or a ship) or a manufacturing facility that provides for the shipper (processor) to pay specified amounts periodically in return for the transportation (processing) of a product. The shipper (processor) is obligated to provide specified minimum quantities to be transported (processed) in each period and is required to make cash payments even if it does not provide the contracted quantities.")) for each period for which an income statement is presented. The preceding disclosures may be omitted only if the aggregate commitment for all such obligations not disclosed is immaterial. ##### [440-10-50-5](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:28.790Z to 2026-09-10T00:25:28.790Z Record version: sha256:2e20fd29de1fe87805f5d8117ac440270d9d0e233b19936034bde41e867290bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosure of the amount of imputed interest necessary to reduce the unconditional purchase obligation(s) to present value is encouraged but not required. The discount rate shall be the effective initial interest rate of the borrowings that financed the facility (or facilities) that will provide the contracted goods or services, if known by the purchaser. If not, the discount rate shall be the [purchaser's incremental borrowing rate](https://asc.understandingaccounting.org/glossary/p/#purchaser-s-incremental-borrowing-rate "The rate that, at the inception of an unconditional purchase obligation, the purchaser would have incurred to borrow over a similar term the funds necessary to discharge the obligation.") at the date the obligation is entered into. #### Recognized Commitments ##### [440-10-50-6](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:28.790Z to 2026-09-10T00:25:28.790Z Record version: sha256:737e4031ea2f45224e6260a2947a3600e5010a2aadda4172b643bb63462fe132 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A purchaser shall disclose for each of the five years following the date of the latest balance sheet presented the aggregate amount of payments for unconditional purchase obligations that meet the criteria of paragraph [440-10-50-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-2) and that have been recognized on the purchaser's balance sheet. ##### [440-10-50-7](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:28.790Z to 2026-09-10T00:25:28.790Z Record version: sha256:48c2c7f11a50369ef41461dddf5ba9f6a23a98fad7011659004e9bd5cb9fb1ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [815-10-50-6](https://asc.understandingaccounting.org/asc/815/10/#815-10-50-6) explains that, if an unconditional purchase obligation is subject to the requirements of both this Subtopic and Subtopic 815-10, the entity shall comply with the disclosure requirements of each Subtopic including paragraph [440-10-50-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-4). Source downloaded (UTC): 2026-09-10T00:25:30.951Z to 2026-09-10T00:25:30.951Z Record version: sha256:aef58dbe7baedef6b4d242921964fed8fb4e963b8a01f73da44080663a746469 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 440-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/440/10/#55-implementation-guidance-and-illustrations) SEC content: no ### Unconditional Purchase Obligations #### Illustrations ##### [440-10-55-1](https://asc.understandingaccounting.org/asc/440/10/#440-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:30.951Z to 2026-09-10T00:25:30.951Z Record version: sha256:554ae5b05f5c91a2a80ea8d18cbbdce74c12725f3bfa40e808ce9f7e8c372bb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used in the disclosure of [unconditional purchase obligations](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)."). ##### [440-10-55-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:30.951Z to 2026-09-10T00:25:30.951Z Record version: sha256:366fe33452044f9e2216dacfad2525b6c70e3e63e30ff3a55ad5144720495248 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [440-10-50-4 through 50-5](https://asc.understandingaccounting.org/asc/440/10/#440-10-50-4) . ##### [440-10-55-3](https://asc.understandingaccounting.org/asc/440/10/#440-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:30.951Z to 2026-09-10T00:25:30.951Z Record version: sha256:8b1df551a365fa14093f05bbe9f14d58c04224a5b4924bca9043436ce551f20a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A has entered into a [throughput contract](https://asc.understandingaccounting.org/glossary/t/#throughput-contract "An agreement between a shipper (processor) and the owner of a transportation facility (such as an oil or natural gas pipeline or a ship) or a manufacturing facility that provides for the shipper (processor) to pay specified amounts periodically in return for the transportation (processing) of a product. The shipper (processor) is obligated to provide specified minimum quantities to be transported (processed) in each period and is required to make cash payments even if it does not provide the contracted quantities.") with a manufacturing plant providing that Entity A will submit specified quantities of a chemical (representing a portion of plant capacity) for processing through the plant each period while the debt used to finance the plant remains outstanding. Entity A's processing charges are intended to be sufficient to cover a proportional share of fixed and variable operating expenses and debt service of the plant. If, however, the processing charges do not cover such operating expenses and debt service, Entity A must advance additional funds to cover a specified percentage of operating expenses and debt service. Such additional funds are considered advance payments for future throughput. ##### [440-10-55-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:30.951Z to 2026-09-10T00:25:30.951Z Record version: sha256:dac198b743485f6fd2d1df74ad71962d9cfef9429aeeb5f40d4ee1be35ea144c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A's unconditional obligation to pay a specified percentage of the plant's fixed operating expenses and debt service is fixed and determinable, while the amount of variable operating expenses that Entity A is obligated to pay will vary depending on plant operations and economic conditions. ##### [440-10-55-5](https://asc.understandingaccounting.org/asc/440/10/#440-10-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:30.951Z to 2026-09-10T00:25:30.951Z Record version: sha256:c8e95ac5be59dbd31f9f919d3ede94ebf0191c8e854fbaff4982ed7a8873626a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A's disclosure might be as follows. - To secure access to facilities to process chemical X, the entity has signed a processing agreement with a chemical supplier allowing the entity to submit 100,000 tons for processing annually for 20 years. Under the terms of the agreement, the entity may be required to advance funds against future processing charges if the chemical supplier is unable to meet its financial obligations. The aggregate amount of required payments at December 31, 19X1, is as follows (in thousands). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-79707E92-DF19-4B98-8E51-A819456282EA-low.gif) 19X2 " $10,000 " 19X3 " 10,000 " 19X4 " 9,000 " 19X5 " 8,000 " 19X6 " 8,000 " Later years " 100,000 " Total " 145,000 " Less: Amount representing interest " (45,000)" Total at present value " $100,000 " - In addition, the entity is required to pay a proportional share of the variable operating expenses of the plant. The entity's total processing charges under the agreement in each of the past 3 years have been $12 million. Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:4d0c8ff250d25b8d2fda3bb2eef683497519d67ce9c7d0d0bdb3c8e905cacb01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 440-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/440/10/#60-relationships) SEC content: no #### Receivables ##### [440-10-60-1](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:6a5d68eb89024cbf4837944a5381da7bac4021a40a5cd83b26c9d3bf8c4fefbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For fees received for a commitment to originate or purchase a loan or group of loans, see Subtopic 310-20. #### Inventory ##### [440-10-60-2](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:1e0d99ac31b2d327d10f0fc692d656405469432184e5256ad90502bf8612300c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on accrual of net losses on firm purchase commitments for goods for inventory, see paragraph [330-10-35-17](https://asc.understandingaccounting.org/asc/330/10/#330-10-35-17). #### Asset Retirement and Environmental Obligations ##### [440-10-60-3](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:8a2b7791cc079cadb26549668509f27073864a1910b0973dd229b6dc4dd50de6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For postremediation monitoring commitments, see Subtopic 410-30. ##### [440-10-60-4](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:f2e2ee700e57533db513971ac3845678940b9c860165b5b7493a6be45883e48c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2018-07](https://asc.understandingaccounting.org/updates/asu-2018-07/). ##### [440-10-60-5](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:bf6d0a1c92b5d58f9aeacf89a149b06c5ba230bb892323b14a0c2cfe2d535d7a 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/). #### Compensation—Retirement Benefits ##### [440-10-60-6](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:de6be2132a14f5c7a05114c49be5cb4e633351d536211d048d7c73bbc1b363c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For commitments related to pension plans, see Topic 715. #### Other Expenses ##### [440-10-60-7](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:07e1618bacff1ecc07801f23e51c29824c631a7473e5b5c88986da647c7a03bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For commitments to contribute, see Subtopic 720-25. #### Research and Development ##### [440-10-60-8](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:c1b5bf954299fc34e9eb728669e3b2b3c43eb86d70f7fe79b5789e91e578f7a1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For royalty arrangements, purchase provisions, license agreements, and commitments to provide additional funding and other commitments under research and development arrangements, see Subtopic 730-20. #### Derivatives and Hedging ##### [440-10-60-9](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:2db88916e77871e472408edcb7a1939d3a82a4f77f6e7acac26be2a409ff9c21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For designating a derivative instrument as a hedge of the exposure to changes in the fair value of an unrecognized firm commitment, see Subtopic 815-25. ##### [440-10-60-10](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:1bb7b50a4b6e408bd31ea167a4946b679078fb5773c5ae1a1851b22c9149e38c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For loan commitments that relate to the origination of mortgage loans that will be held for sale, see paragraph [815-10-15-71](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-71). #### Foreign Currency Matters ##### [440-10-60-11](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:caca24a752d3b2c01c5416466b02c6e3081fd0d796452efb19709c70ac818cac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For foreign currency commitments, see paragraph [830-20-35-3](https://asc.understandingaccounting.org/asc/830/20/#830-20-35-3). #### Leases ##### [440-10-60-12](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:845d5596af7c9d36342a6cea34362096ef1e90d0686b3d7a1711b389aa9845b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For commitments under [leases](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration."), see Topic 842 ##### [440-10-60-13](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:7626ee9ac24f49e495231908523db3e6311f506291b8bed99d2b81591abd2476 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For nuclear fuel leases structured as [take-or-pay contracts](https://asc.understandingaccounting.org/glossary/t/#take-or-pay-contract "An agreement between a purchaser and a seller that provides for the purchaser to pay specified amounts periodically in return for products or services. The purchaser must make specified minimum payments even if it does not take delivery of the contracted products or services."), see paragraph [842-10-55-1](https://asc.understandingaccounting.org/asc/842/10/#842-10-55-1). #### Transfers and Servicing ##### [440-10-60-14](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:58cea2a17a418cf82fd46001f3448cb9f0e41b62fe2f4d2a6709ce95229aa38d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For assets pledged as collateral for secured borrowings, see Subtopic 860-30. #### Financial Services—Mortgage Banking ##### [440-10-60-15](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:d85b70139cc0e717cbd162f4c5c7efd622d09ba9439d6fe5146d9284f296528e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For fair value of committed and uncommitted mortgage loans and mortgage-backed securities, see Section 948-310-35. ##### [440-10-60-16](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:d45e5eb275171e3d40316320423b05a40d7c70252c092ecbb867575fab5c1232 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For recognition of loan and commitment fees, see paragraph [948-310-35-7](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-7). ##### [440-10-60-17](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:b5fb76e11b240f45786d5b64a54d951c85210f1e2f27c857404670fe35889062 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For commitment fees relating to loans held for sale (residential or commercial loan commitment fees), see paragraph [948-720-25-1](https://asc.understandingaccounting.org/asc/720/948/#720-948-25-1). #### Health Care Entities ##### [440-10-60-18](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:b0a95493114911dd908ad732afcd60cef133462f7856c9498996802d3762d457 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For prepaid health care services contracts, see paragraph [954-450-25-4](https://asc.understandingaccounting.org/asc/450/954/#450-954-25-4). ##### [440-10-60-19](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:dccd310744e5ed388c36f6a85a119eb01c0e4bc0a32fc7da7cc725377af89aa1 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/). ##### [440-10-60-20](https://asc.understandingaccounting.org/asc/440/10/#440-10-60-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:25:35.069Z to 2026-09-10T00:25:35.069Z Record version: sha256:4f7b1d87a73062e7094f62d24932f8a863c5880c25b49a76f51536ba60e04e3b 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/).