Inventory

9 Months Ended

Jun. 30, 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 of June 30, 2022, the Company determined that no communities were impaired, and no impairment charges were recorded during the three months ended June 30, 2022. During the nine months ended June 30, 2022, Forestar recorded a $3.8 million impairment charge related to one land development project. There were no impairment charges recorded in the prior year quarter and $5.6 million of impairment charges recorded in the nine months ended June 30, 2021.

During the three and nine months ended June 30, 2022, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $10.6 million and $26.8 million, respectively, compared to $5.6 million and $12.0 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.