Inventory

6 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

INVENTORY

INVENTORIES

At the end of each quarter, the Company reviews the performance and outlook for all of its communities and land inventories for indicators of potential impairment and performs detailed impairment evaluations and analyses when necessary. As a result of this review, Forestar recorded a $3.8 million impairment charge related to one land development project during the three and six months ended March 31, 2022. There were no impairment charges recorded in the prior year quarter and $5.6 million of impairment charges recorded in the six months ended March 31, 2021.

During the three and six months ended March 31, 2022, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $11.4 million and $16.2 million, respectively, compared to $3.8 million and $6.5 million in the same periods of fiscal 2021. Inventory impairments and land option charges are included in cost of sales in the consolidated statements of operations.