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Accounting For Equipment Manufacturing

"My company does contract manufacturing of capital equipment. We currently use a cost to cost measurement to calculate POC and recognize revenue on WIP. How does this change under the new rules?" This question was asked at this Proformative Webinar: "The New World of Revenue Recognition: Industry Impacts and Transition Options" What's your take on it?

This question was asked at this Proformative Webinar: "The New World of Revenue Recognition: Industry Impacts and Transition Options"

Answers

Jeff Tchir
Title: Founder and Technical Advisor, RevRec.NE..
Company: RevRec.NET
LinkedIn Profile
(Founder and Technical Advisor, RevRec.NET, RevRec.NET) |

Certainly cost-based input methods continue to be acceptable, provided however that the method chosen depicts the performance towards transferring control. So, if you don't already do so, you may have to adjust your cost-to-cost calculation to exclude things like: costs of unexpected inefficiencies, or materials purchased but not yet used in production.

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