USA How to account for instrument placed with cusotmers

[apj101]

Hi all,
Quick questions. Our business model is to place a piece of equipment (value c10k) with customers for free. The customer uses this equipment to run scans and each scan will generate an order for a consumable which we will ship to them.
Obviously, the cogs for the consumable are easy. But how do I account for the scanner?
We retain legal ownership so my sense is just capex with a dep/amort over its life. But does that dep/amort charge belong in cogs?
What's the correct treatment and standard
thx

 

[StanleyR1]

No, the Depr/Amort is not included in Cost of Goods Sold.

 

[Praz Finpoint]

The existing accounting treatment of recording a Fixed Asset and depreciation over the Asset useful life is indeed correct.

As to whether the depreciation expense must go into Cost of Sales - no and the reason being is because you do not generate any Sales Revenue from the piece of equipment provided to the customer.