How to Record Device Placement Agreements
Accounting for a 'free' analyzer placed at a customer site where the cost is recovered through the subsequent sale of high-margin consumables (reagents).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Deferred Cost of Sales - Placed Equipment | Debit | 85,000.00 | - |
| Inventory - Finished Goods | Credit | - | 85,000.00 |
💡 Accountant's Note
The cost of the equipment is capitalized as a deferred cost and typically amortized to COGS over the life of the reagent supply contract, matching the expense with the revenue generated by the consumables.
Practitioner & Systems Framework
💻 ERP Architecture
Link the equipment asset ID to the reagent sales contract for automated monthly amortization.
⚠️ Audit Flags
Amortization period exceeding the underlying reagent contract term.
📄 Required Documentation
Reagent Purchase Agreement (RPA) specifying minimum volume commitments.
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