In the cost recovery method provid is not recognized until the sum of the cash receipts exceed the costs of the asset sold. If for example a company sells a specific assets costing USD 40 000 for the price of USD 60 000 in year one, but the cash receipt is only USD 30 000 in the current year, the revenue will not be recognized until the next year, to the extent that in year two the sales exceed USD 10 000 (cost of 40 000 – cash collected 30 000) . The cost recovery method is used when the collection is so uncertain that even the installment method is not allowed.