Inventory

12 Months Ended

Sep. 30, 2019

Inventory Impairments and Land Option Cost Write-Offs [Abstract]

Inventory

INVENTORIES

At the end of each quarter during fiscal 2019, the Company reviewed the performance and outlook for all of its communities and land inventories for indicators of potential impairment and performed detailed impairment evaluations and analyses when necessary. As of September 30, 2019, the Company performed detailed impairment evaluations of communities and land inventories with a combined carrying value of $55.9 million and recorded impairment charges of $7.1 million during the fourth quarter to reduce the carrying value of impaired communities and land to fair value. Total impairment charges during fiscal 2019, 2018 and 2017 were $25.7 million, $11.8 million and $23.2 million, respectively. Inventory impairments and the land option charges discussed below are included in cost of sales in the consolidated statements of operations.

During fiscal 2019, 2018 and 2017, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $28.3 million, $14.1 million and $17.0 million, respectively. Total inventory and land option charges for fiscal 2018 also included a charge of $24.5 million related to the settlement of an outstanding dispute associated with a land transaction.

In fiscal 2018, the Forestar segment sold a portion of its assets for $232 million. This strategic asset sale included projects owned both directly and indirectly through ventures. The total net proceeds after certain purchase price adjustments, closing costs and other costs associated with selling these projects was $217.5 million, and a gain on the sale of these assets of $0.7 million is included in the Company’s consolidated statement of operations for the year ended September 30, 2018.