recognize profit under the percentage-of-completion method for individual units in a condominium project that are being sold separately. One criterion is that the sales price is collectible (paragraph 37(d) of Statement 66). To provide guidance on how entities should assess the collectibility of the sales price, paragraph 37(d) of Statement 66 parenthetically references paragraph 4 of Statement 66. 2. Under paragraph 4 of Statement 66, “... collectibility of the sales price is demonstrated by the buyer’s commitment to pay, which in turn is supported by substantial initial and continuing investments that give the buyer a stake in the property sufficient that the risk of loss through default motivates the buyer to honor its obligation to the seller. Collectibility shall also be assessed by considering factors such as the credit standing of the buyer, age and location of the property, and adequacy of cash flow from the property. ” Questions have been raised about whether the continuing investment test in paragraph 12 of Statement 66 should be applied in order to conclude that the sales price is collectible and to recognize profit under the percentage-of-completion method. 3. The issues are: Issue 1—Whether an entity needs to evaluate the adequacy of the buyer’s continuing investment pursuant to paragraph 12 of Statement 66 to recognize profit under the percentage-of-completion metho
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