# ASC 910-10-15: Contractors—Construction — Overall — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/910/10/#15-scope-and-scope-exceptions) 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): 2026-09-10T02:09:10.326Z to 2026-09-10T02:09:10.326Z Record version: sha256:023343b4226dc6a7dbbd76dc4f1588b13fe6b06e5f945de4877a2d62abedf3dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/910/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [910-10-15-1](https://asc.understandingaccounting.org/asc/910/10/#910-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:10.326Z to 2026-09-10T02:09:10.326Z Record version: sha256:1599ff648afef776a766b66885bde744930983cf6a2ce06247569d7de6a4e974 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Subtopics within the Contractors—Construction Topic only provide incremental industry-specific guidance for the entities defined in this Scope Section, or as further defined in the Scope Sections of the individual Subtopics. Entities within the scope of this Topic shall also comply with the applicable standards not included in this Topic. #### Entities ##### [910-10-15-2](https://asc.understandingaccounting.org/asc/910/10/#910-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:10.326Z to 2026-09-10T02:09:10.326Z Record version: sha256:139ba4c19a695d217110d5c4e842d318840c7e78684112af517aa8ce9c4bd0bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Contractor Accounting—Construction Contractors Topic provides guidance for entities that perform construction-type contracts. ##### [910-10-15-3](https://asc.understandingaccounting.org/asc/910/10/#910-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:10.326Z to 2026-09-10T02:09:10.326Z Record version: sha256:1d543234b701c91427045020b4c573b4e774ff46a863c99a0dae0ca92d4820bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although the construction industry is difficult to define because of its diversity, certain characteristics are common to entities in the industry. The most basic characteristic is that work is performed under contractual arrangements with customers. A contractor, regardless of the type of construction activity or the type of contractor, typically enters into an agreement with a customer to build or to make improvements on a tangible property to the customer's specification. The contract with the customer specifies the work to be performed, specifies the basis of determining the amount and terms of payment of the contract price, and generally requires total performance before the contractor's obligation is discharged. Unlike the work of many manufacturers, the construction activities of a contractor are usually performed at job sites owned by customers rather than at a central place of business, and each contract usually involves the production of a unique property rather than repetitive production of identical products. ##### [910-10-15-4](https://asc.understandingaccounting.org/asc/910/10/#910-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:10.326Z to 2026-09-10T02:09:10.326Z Record version: sha256:097ff4aaaafe18f278037d4e64b8c161df53679e90d603a9d5b48bfa23d6d145 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other characteristics common to contractors and significant to accountants and users of financial statements include the following: 1. a A contractor normally obtains the contracts that generate revenue or sales by bidding or negotiating for specific projects. 2. b A contractor bids for or negotiates the initial contract price based on an estimate of the cost to complete the project and the desired profit margin, although the initial price may be changed or renegotiated. 3. c A contractor may be exposed to significant risks in the performance of a contract, particularly a fixed-price contract. 4. d Customers (usually referred to as owners) frequently require a contractor to post a performance and a payment bond as protection against the contractor's failure to meet performance and payment requirements. 5. e The costs and revenues of a contractor are typically accumulated and accounted for by individual contracts or contract commitments extending beyond one accounting period, which complicates the management, accounting, and auditing processes. 6. f The nature of a contractor's risk exposure varies with the type of contract. The several types of contracts used in the construction industry are described in paragraphs [605-35-15-2 through 15-5](https://asc.understandingaccounting.org/asc/605/35/#605-35-15-2) . The four basic types of contracts used based on their pricing arrangements are [fixed-price](https://asc.understandingaccounting.org/glossary/f/#fixed-price-contracts "A fixed-price or lump-sum contract is a contract in which the price is not usually subject to adjustment because of costs incurred by the contractor. See also the following common variations of fixed-price contracts: Firm Fixed-Price Contract Fixed-Price Contract with Economic Price Adjustment Fixed-Price Contract Providing for Prospective Periodic Redetermination of Price Fixed-Price Contract Providing for Retroactive Redetermination of Price Fixed-Price Contract Providing for Firm Target Cost Incentives Fixed-Price Contract Providing for Successive Target Cost Incentives Fixed-Price Contract Providing for Performance Incentives Fixed-Price Level-of-Effort Term Contract.") or [lump-sum contracts](https://asc.understandingaccounting.org/glossary/l/#lump-sum-contract "See Fixed-Price Contracts."), [unit-price contracts](https://asc.understandingaccounting.org/glossary/a/#unit-price-contracts "Contracts under which the contractor is paid a specified amount for every unit of work performed. A unit-price contract is essentially a fixed-price contract with the only variable being units of work performed. Variations in unit-price contracts include the same type of variations as fixed-price contracts. A unit-price contract is normally awarded on the basis of a total price that is the sum of the product of the specified units and unit prices. The method of determining total contract price may give rise to unbalanced unit prices because units to be delivered early in the contract may be assigned higher unit prices than those to be delivered as the work under the contract progresses."), [cost-type contracts](https://asc.understandingaccounting.org/glossary/c/#cost-type-contracts "Contracts that provide for reimbursement of allowable or otherwise defined costs incurred plus a fee that represents profit. Cost-type contracts usually only require that the contractor use his best efforts to accomplish the scope of the work within some specified time and some stated dollar limitation. See also the following common variations of cost-plus contracts: Cost-Plus-Award-Fee Contract Cost-Plus-Fixed-Fee Contract Cost-Plus-Incentive-Fee Contract (Incentive Based on Cost) Cost-Plus-Incentive-Fee Contract (Incentive Based on Performance) Cost-Sharing Contract Cost-Without-Fee Contract."), and [time-and-materials contracts](https://asc.understandingaccounting.org/glossary/a/#time-and-material-contracts "Contracts that generally provide for payments to the contractor on the basis of direct labor hours at fixed hourly rates (that cover the cost of direct labor and indirect expenses and profit) and cost of materials or other specified costs. Common variations of time and material contracts areas follows: Time at marked-up rate Time at marked-up rate, material at cost Time and material at marked-up rates Guaranteed maximum cost—labor only or labor and material.").