Cost Recovery Method

Knowledge Center


Description of Cost Recovery Method. Explanation.


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.

Special Interest Group - Cost Recovery Method

Special Interest Group (7 members)

Forum - Cost Recovery Method  

In the forum section you will find recent discussions within this knowledge area.

  Quotes on Cost Recovery. Quotations (1 reactions)
Hi, do you know of a remarkable, humorous quote by a famous ...

Best Practices - Cost Recovery Method

In the best practices section you will find the best forum discussions within this knowledge area.

Expert Tips - Cost Recovery Method

In the expert tips section you will find advices from experts within this knowledge area.

Resources - Cost Recovery Method

In the Resources section you will find powerpoint presentations, micro-learning videos, articles, news items, etc. within this knowledge area.


News about Cost Recovery Method


Videos about Cost Recovery Method


Presentations about Cost Recovery Method


Books about Cost Recovery Method


More about Cost Recovery Method

Special Interest Group Leader

You here? Sign up for free


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 / Cite us | Privacy | Suggestions | Terms of Service
2019 12manage - The Executive Fast Track. V15.0 - Last updated: 20-6-2019. All names of their owners.