Cost Recovery Method

Knowledge Center

   

Contents

  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print
 
Cost Recovery Method

Definition Cost Recovery Method. Description


The Cost Recovery Method is one of several Revenue Recognition approaches under U.S. GAAP, in which revenue is recognized subsequently to the sale.


When collections on installment sales occur over an extended period and no reasonable basis for estimating collectability exists, U.S. GAAP allows companies to use the cost recovery method for recognizing profits on such sales.


Under this method, no profit is recognized until cash collections from the buyer exceed the seller's cost of goods sold. After the cost of the merchandise has been recovered, any cash collected in excess of this amount is recorded as recognized gross profit in the seller's income statement.


For example, if a company sold a machine worth $20,000 for $30,000, it can start recognizing profit only after the buyer has paid more than $20,000.


Cost Recovery Method Forum
  Quotes on Cost Recovery. Quotations
Hi, do you know of a remarkable, humorous quote by a famous person or a proverb related to cost recovery?
Please enter a reaction to share it for other people to enjoy! Please use this template:
Author Name Year of Birth - Year of Death, short ...
     
 

Cost Recovery Method Special Interest Group


Special Interest Group

 

Best Practices - Cost Recovery Method Premium

Expert Tips - Cost Recovery Method Premium

Resources - Cost Recovery Method Premium
 

News

Cost Recovery Method
     
 

Videos

Cost Recovery Method
     
 

Presentations

Cost Recovery Method
     
 

More

Cost Recovery Method
     
Special Interest Group Leader

You here


 

Return to Management Hub: Finance & Investing


More on Management  |  Return to Management Dictionary  | 

 

This ends our Cost Recovery Method summary and forum.

About 12manage | Advertising | Link to us | Privacy | Terms of Service
Copyright 2016 12manage - The Executive Fast Track. V14.1 - Last updated: 25-9-2016. All names tm by their owners.