progress payments as financing

Liabilities1

1. 405-912Contractors—Federal Government405 Liabilities

   ASC 405-912 tells federal government contractors how to present and disclose liabilities arising from terminated contracts and from progress/advance payments. Termination loans (even if government-guaranteed) are third-party liabilities shown as current liabilities with cross-reference to the related claim; unliquidated advance payments on a terminated contract are deducted from the claim receivable. Progress and advance payments accounted for as borrowings under 912-310-25-7 are reported as cash received from financing activities.