- posted 7 years ago
Let's say you're in a job costing type of environment where you lease particular structures or devices that you build to companies over so many years. Let's say that the initial lease is for 10 years. Do you take the total finished goods cost and move it to cost of sales over 10 years? Or should it be costed out not depending on the lease term but rather on the asset type (like depreciating it basically). It seems like there could be issues with consistency if once the 10 years is up, they resign the lease, and then cost of sales drops dramatically... thoughts?