Hello,
A formatted ASCII file is a simple text file that you can open and modify with a simple editor like Wordpad, with lines separated by carriage returns, as opposed to binary files which are rather a mere succession of bytes which code for anything. Both types of files are opened differently in Fortran with the OPEN statement, adding FORM='FORMATTED' or FORM='UNFORMATTED', and read differently with the READ statement.
With best regards,
Jean-Michel Hervouet