# ASC 705-10-25: Cost of Sales and Services — Overall — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/705/10/#25-recognition) 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): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:d4704ac31953841e86fdf2727f1229dd484e9ae411c2c6552aebf68c325ecb6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 705-10-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/705/10/#25-recognition) SEC content: no ##### [705-10-25-1](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:bcbaf4c3132d01f500d73173d08571e876a507cacdffcce2d9d241bdc94eeb71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section consists solely of links to other Subtopics because the asset liability model used in the Codification requires that applicable guidance be included in other Topics. In addition, the following may not represent a complete list of other Topics containing cost of sales and services guidance. #### Inventory ##### [705-10-25-2](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:9ed7775643b39dd317a6a4bfbf34ebac6a2ba83590436994b2df0f2bdcabdbe4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [330-10-35-1A through 35-11](https://asc.understandingaccounting.org/asc/330/10/#330-10-35-1A) for adjustments affecting cost of sales and services resulting from the subsequent measurement of inventory. ##### [705-10-25-3](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:a17a015f82e8fa78581a2519a477e72a5bb4c94c1bfec523a6b59243439026ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [330-10-30-1 through 30-13](https://asc.understandingaccounting.org/asc/330/10/#330-10-30-1) for adjustments affecting cost of sales and services resulting from establishing the cost basis and the use of inventory pricing methods. ##### [705-10-25-4](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:007bc056dff0159abb5b2161a651ee81aef5cd890a0ce64d088594cac1b607d7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Topic 606 on [revenue](https://asc.understandingaccounting.org/glossary/r/#revenue "Inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.") from [contracts](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with [customers](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration."), specifically paragraph [606-10-32-10](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-10) and paragraphs [606-10-55-22 through 55-29](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-22) for the accounting for a sale with a right of return. #### Other Assets and Deferred Costs—Contracts with Customers ##### [705-10-25-4A](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-4A) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:e10d2b21173da835eac38f7abc471c32e7b40ab91e38490f1e8ca0c2e91c69bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Subtopic 340-40 for guidance on the following costs related to a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with a [customer](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration.") within the scope of Topic 606 on revenue from contracts with customers: 1. a Incremental costs of obtaining a contract with a customer 2. b Costs incurred in fulfilling a contract with a customer that are not within the scope of another Topic. #### Property, Plant, and Equipment ##### [705-10-25-5](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:d30e0328a332a1c782f719d025335a51d21e1c1a284810a24ff3dd9c88e18d3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [360-10-35-38 through 35-40](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-38) for a discussion of the costs to sell long-lived assets classified as held for sale for purposes of measuring the expected disposal loss. ##### [705-10-25-6](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:cdbfd47a951e22df9e3ae8d54ec5bd462a6f0e69b9b47e628e6be1e530d88c57 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/). #### Interim Financial Reporting ##### [705-10-25-7](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:7940310d5a86986ffc81cd0d34127d4b3fc9c9cf89ff7fcdd3450c7488c573e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [270-10-45-4 through 45-6](https://asc.understandingaccounting.org/asc/270/10/#270-10-45-4) for a discussion of recognition principles used for cost of sales and services used in reporting on an interim basis. #### Extended Warranty and Product Maintenance Contracts ##### [705-10-25-8](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:cef00b02eac7fa667da38828c40c9dd16b0d0fb626abe002c13c98377b3d96ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [605-20-25-6](https://asc.understandingaccounting.org/asc/605/20/#605-20-25-6) for guidance on recognizing a loss on separately priced extended warranty and product maintenance contracts. #### Consideration Received from a Vendor ##### [705-10-25-9](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:6900eef9d06c7cdc16c7d7c352c24e9bb60632bbd6897a03514e95f1d5c4a54a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Subtopic 705-20 for a discussion of consideration received from a vendor by a customer. ##### [705-10-25-10](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:e302e0bf9e045322e4e4f79d85f6194864a76e49508d437632ecfd3208b099a8 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/). ##### [705-10-25-11](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:22c51bacf606bf8a148684498d743b76761a5ef2e11c19f75e24494b0d253191 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/). ##### [705-10-25-12](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:6ddfef5c9739ec5a6b42c5e292aaf01733adc873a1426d018e9b63bfc68d4968 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/). #### Costs Resulting from Share-Based Payment Transactions ##### [705-10-25-13](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:5ab2abbf56d251d3894e7b4fee726f13cdd6206eb32eb71e7ec0cdeb666ac712 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 718-10-25 for a discussion of recognition principles for costs incurred under share-based payment transactions. #### Costs of Computer Software Sold ##### [705-10-25-14](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:cf65e5a35e3210f5a82ee8244b2c8d834d4fa9447a0e979c4875ef0c8949b66b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on costs incurred for duplicating the computer software, documentation, and training materials from product masters and for physically packaging the product for distribution, see Subtopic 985-330. ##### [705-10-25-15](https://asc.understandingaccounting.org/asc/705/10/#705-10-25-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:47.878Z to 2026-09-10T00:55:47.878Z Record version: sha256:82f35d874de95fae3c82152b6489e000fda37619f65d8ab7ecc4f7bdcb3c99d7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Subtopic 350-40 for a discussion of the cost of internal-use computer software sold.