# ASC 910-20: Contractors—Construction — Contract Costs Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/910/20/) 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): 2026-09-10T02:09:32.963Z to 2026-09-10T02:09:53.961Z Record version: sha256:8b8c7bdf5df69842d7691f0b69e5766dfac9ad30543042d005ce0ded899b2bd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-20: Contractors—Construction — Contract Costs ### Machine-generated study aids ```json { "summary": "ASC 910-20 governs how construction contractors account for contract costs, focusing on charging equipment and small tool costs to specific contracts. Equipment cost is allocated to contracts on a reasonable basis (time, hours of use, or mileage) using a \"use rate\" that considers equipment cost less salvage/rental, probable life, average idle time, and operating costs. It also requires disclosure of unapproved change orders and claims included in contract costs and of progress payments netted against contract costs.", "key_points": [ "Operating unit costs for construction equipment may be included in contract cost under the use rate theory (910-20-25-1).", "Equipment cost must be allocated to the particular contract on which it is used on a reasonable basis such as time, hours of use, or mileage (910-20-25-2).", "Idle equipment time (e.g., a winter shutdown) may be considered in indirect cost allocations, and rates geared to cover all costs—approximating market lease rates without the profit element—are appropriate (910-20-25-3).", "Small tools may be accounted for as inventory or fixed assets and are charged to a contract as consumed; operating and maintenance costs of miscellaneous small tools are usually charged to overhead unless they relate to specific contracts, and contract costs must be credited with estimated salvage value of tools remaining at completion (910-20-25-4).", "In applying the use rate theory, consider equipment cost less salvage value or rental if leased, probable life, average idle time, and operating costs such as repairs, storage, insurance, and taxes (910-20-30-1).", "Disclose the aggregate amount in contract costs representing unapproved change orders, claims, or similar uncertain items, with a description of nature, status, and recording basis (cost or realizable value) (910-20-50-1(a)).", "Disclose the amount of progress payments netted against contract costs at the balance sheet date (910-20-50-1(b))." ], "categories": [ "Industry-specific", "Initial measurement", "Disclosure", "Inventory and PP&E" ], "audience_level": "intermediate", "student_note": "Exam questions here usually test whether a given cost is a direct contract cost, overhead, or a use-rate allocation—remember that idle equipment cost is not simply expensed but can be built into the use rate. A common misunderstanding is thinking all small tool costs go directly to contracts; operating and maintenance costs of miscellaneous small tools normally go to overhead, and remaining tools' salvage value must be credited back to contract costs.", "related_topics": [ "910-10", "910-405", "606-10", "340-40", "912-20" ], "key_concepts": [ "contract costs", "use rate theory", "equipment cost allocation", "idle equipment time", "small tools", "unapproved change orders and claims", "progress payments", "construction contractors" ] } ``` Source downloaded (UTC): 2026-09-10T02:09:32.963Z to 2026-09-10T02:09:32.963Z Record version: sha256:c1f4dab67c3e79330e25653d3ae034d36bd6dad24581d88a4962a77993c637ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/910/20/#00-status) SEC content: no ##### [910-20-00-1](https://asc.understandingaccounting.org/asc/910/20/#910-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:32.963Z to 2026-09-10T02:09:32.963Z Record version: sha256:87c68e4dfa5b988c507ca35c1e1726a18be8862312c517ddded9da510a1465e6 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
910-20-25-4AmendedMaintenance Update 2019-01 (PDF)01/08/2019
910-20-25-5SupersededAccounting Standards Update No. 2014-0905/28/2014
910-20-60-1SupersededMaintenance Update 2019-01 (PDF)01/08/2019
Source downloaded (UTC): 2026-09-10T02:09:35.080Z to 2026-09-10T02:09:35.080Z Record version: sha256:ed9c6cf54a702a94fa620f53af55916d87c4ca54dd2c89c2e77a3b7aac7f383c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/910/20/#05-overview-and-background) SEC content: no ##### [910-20-05-1](https://asc.understandingaccounting.org/asc/910/20/#910-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:35.080Z to 2026-09-10T02:09:35.080Z Record version: sha256:5e06b53aecd3111df41bdd7961fcb8e4cf33bebedb4e646eaff68ca52d98f551 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses accounting for contract costs by construction contractors. Source downloaded (UTC): 2026-09-10T02:09:38.861Z to 2026-09-10T02:09:38.861Z Record version: sha256:41b57c0cd8323da98f2b3e979b27cb252c431d3f22a5b46e81c2a83df23c4a82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/910/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [910-20-15-1](https://asc.understandingaccounting.org/asc/910/20/#910-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:38.861Z to 2026-09-10T02:09:38.861Z Record version: sha256:49c03b736c36fcc8c323730205ac1bba0e4ce59e40ce0f572fe3acaeb153bfdc 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 910-10-15. Source downloaded (UTC): 2026-09-10T02:09:41.664Z to 2026-09-10T02:09:41.664Z Record version: sha256:e7985b3f025986b2a41cc442b75f36f101c6a5a1f750718b07d26f00a76b91c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/910/20/#25-recognition) SEC content: no #### Operating Unit Cost for Construction Equipment ##### [910-20-25-1](https://asc.understandingaccounting.org/asc/910/20/#910-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:41.664Z to 2026-09-10T02:09:41.664Z Record version: sha256:bcde9e810e2001092eb11a825392d2986c934a8cedaa2cddec4d9796b5f251c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Operating unit costs for construction equipment may be included in contract cost using the use rate theory. ##### [910-20-25-2](https://asc.understandingaccounting.org/asc/910/20/#910-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:41.664Z to 2026-09-10T02:09:41.664Z Record version: sha256:6d5eec731182137673826332dec0ca7a4d56e0a4b9d359b2373f9ce0849babd0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A rate may be arrived at, which, based on the reported use of the equipment, will serve as a basis for charging the contracts on which the equipment is used. The cost of a contractor's equipment shall be allocated to the particular contract on which it is used on a reasonable basis, such as time, hours of use, or mileage. ##### [910-20-25-3](https://asc.understandingaccounting.org/asc/910/20/#910-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:41.664Z to 2026-09-10T02:09:41.664Z Record version: sha256:7fbc366a90a5fb618f78f0b4b4841df64aeb738444c841f4b4ca6871ba4e9353 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Idle equipment time, for example if a contractor's equipment is idle during a winter season, may be considered in determining indirect cost allocations. Allocation of idle equipment costs to contracts by use of rates geared to cover all costs is appropriate. That procedure results in rates that lessors of the same type of equipment charge users in the same location, except for the profit element. #### Small Tools ##### [910-20-25-4](https://asc.understandingaccounting.org/asc/910/20/#910-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:41.664Z to 2026-09-10T02:09:41.664Z Record version: sha256:7c0272392f3f5f82b7b40f5e574309dd7db3c15fc80da57aec192fdd23d60a49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Small tools may be accounted for as inventory or fixed assets. Small tools shall be charged to a contract as they are consumed in performance of the contract. Operating and maintenance costs of miscellaneous small tools and equipment are usually charged to overhead accounts rather than specific contracts. However, a contractor may charge the costs directly to specific contracts if they relate to specific contracts. Small tools can frequently be charged to contracts if purchased for the contracts or if issued from a central pool. Contract costs shall be credited with estimated salvage value of small tools remaining at completion of the contracts. ##### [910-20-25-5](https://asc.understandingaccounting.org/asc/910/20/#910-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:41.664Z to 2026-09-10T02:09:41.664Z Record version: sha256:1789f8919d18b9cc1626995fac45aaa22b695eb1df28b9ba00fb9d9b77add45d 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/). Source downloaded (UTC): 2026-09-10T02:09:44.538Z to 2026-09-10T02:09:44.538Z Record version: sha256:cfcf6ac6980708521099346b337a95fdc82f8d5d2a688eedcdd532871688190e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-20-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/910/20/#30-initial-measurement) SEC content: no #### Operating Unit Cost for Construction Equipment ##### [910-20-30-1](https://asc.understandingaccounting.org/asc/910/20/#910-20-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:44.538Z to 2026-09-10T02:09:44.538Z Record version: sha256:b41d1b97cfa2f08e1e610aa2ce9dd5f214fcf2417e8fac724f576658c3f3c5d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In applying the use rate theory (see paragraph [910-20-25-1](https://asc.understandingaccounting.org/asc/910/20/#910-20-25-1)), all of the following factors shall be considered: 1. a The cost of the equipment, less estimates of its salvage value or rental if it is leased 2. b The probable life of the equipment 3. c The average idle time during the life or period of hire of the equipment 4. d The costs of operating the equipment, such as repairs, storage, insurance, and taxes. Source downloaded (UTC): 2026-09-10T02:09:46.305Z to 2026-09-10T02:09:46.305Z Record version: sha256:7a26a8f73a71f85f33dab4356fd2ec433763d3ac6fb3d35f85612ec8c12dd808 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/910/20/#50-disclosure) SEC content: no ##### [910-20-50-1](https://asc.understandingaccounting.org/asc/910/20/#910-20-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:46.305Z to 2026-09-10T02:09:46.305Z Record version: sha256:2730f1cb759d6bfc2bb2a67ebbb8d7b159212a2f04ff4870cb8b9116f199bf8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Both of the following amounts included in contract costs shall be disclosed: 1. a The aggregate amount included in contract costs representing unapproved change orders, claims, or similar items subject to uncertainty concerning their determination or ultimate realization, plus a description of the nature and status of the principal items comprising such aggregate amounts and the basis on which such items are recorded (for example, cost or realizable value) 2. b The amount of progress payments netted against contract costs at the date of the balance sheet. Source downloaded (UTC): 2026-09-10T02:09:50.385Z to 2026-09-10T02:09:50.385Z Record version: sha256:9d0b0b2e08627687674adf1e63864642808b988e9df7c074ae493a1bc80571c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 910-20-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/910/20/#60-relationships) SEC content: no ##### [910-20-60-1](https://asc.understandingaccounting.org/asc/910/20/#910-20-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:09:50.385Z to 2026-09-10T02:09:50.385Z Record version: sha256:5b7ac2c8a9dcb1f2f9d56c8fa2a795ad2fd7e06166c9b92d98bba5beab9826aa 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/).