RE:RE:RE:quater Drrwong,
Your points are well taken. However, under the accounting standard IFRS under which TOS reports, sales are recognized when there is transfer of the risk of ownership. In the present instance, on page 28, the TOS Q3-2018 report states the following:
Revenue Recognition
The Company recognizes revenue from the following major sources:
- Sale of sterilizers and associated license fees;
- Related spare parts, consumable supplies and accessories
- Maintenance services Sale of sterilizers and associated license fees
The Company sells sterilizers directly to customers. Revenue is recognized when control of the goods are transferred to customers, being at the point the goods are shipped.
So, upon shipping to the client's facilities, TOS recognizes the full amount of the sale of a sterilizer. Even if it is accounted under a multiple deliverables scenario, which is a possibility if the sale of a sterilizer is bundled up with the sale of consumables at a preset and committed bundled price, we may see appearing a large receivable and the full amount of the allocated price for the sterilizer.
Agreed with you, there will be a positive value for the COGS.