IIL Cost recovery method Under exceptional circumstances, however, the cost recovery may be used, 1. The cost recovery method may be used where collectibilty of praceeds is highly uncertain, where an investment is very speculative in nature, and/or where the final sale price is to be determined by future events. Under the cost recovery method, all amounts collected are treated as a recoupment of the of the cost of the item sold, until the entire cost associated with the transaction has been recovered. Only at this point profit is recognized. “Think of a country where people were admired for running away in battle, or where a man felt proud Of double-crossing all the people who had been kindest £0 hin. You might just as well try £0 tmagine a country where two and two made five.” - CS. Lewis