In January 2019, the Company’s wholly-owned subsidiary, Accuray Asia Limited (“Accuray Asia”), entered into an agreement with CNNC High Energy Equipment (Tianjin) Co., Ltd. (the “CIRC Subsidiary”), a wholly-owned subsidiary of China Isotope & Radiation Corporation, to form a joint venture, CNNC Accuray (Tianjin) Medical Technology Co. Ltd. (the “JV”), to manufacture and sell radiation oncology systems in China.

In exchange for the 49% equity interest in the JV, the Company, through Accuray Asia, made in-kind capital contributions of two full radiation oncology systems in the quarter ended December 31, 2019 and one system upgrade in the quarter ended September 30, 2020, all of which was not to be sold and only be used for training purposes by the JV. The investments are reported as an Investment in joint venture on the Company’s consolidated balance sheets.

The Company applies the equity method of accounting to its ownership interest in the JV as the Company has the ability to exercise significant influence over the JV but lacks controlling financial interest and is not the primary beneficiary. The Company recognizes the 49% proportionate share of the JV income or loss on a one-quarter lag due to the timing of the availability of the JV’s financial records. The Company recognizes revenue on sales to the JV in the current period of control transfer, eliminating a portion of profit to the extent goods sold have not been sold through by the JV to an end customer by the end of each reporting period. During the years ended June 30, 2022 and 2021, respectively, the Company recognized $1.4 million and $1.8 million of previously deferred intra-entity profit margin from sales and recorded intra-entity profit margin deferrals of $4.7 million and $2.1 million from sales recognized during the period. The Company’s consolidated accumulated deficit at June 30, 2022 includes $1.0 million of cumulative income related to the Company’s equity method investment.

As of June 30, 2022, the Company had a carrying value of $13.9 million in the JV and owned a 49% interest in the entity. The Company’s proportional share of the underlying equity in net assets of the JV was approximately $14.6 million. Under the equity method of accounting, the carrying value of the investment is adjusted for the Company's proportional share of the investee's currency translation adjustment of $1.0 million. The difference between the carrying value of the equity investment and the Company’s proportional share of the underlying equity in net assets of the JV of $1.7 million adding back $5.4 million of eliminated intra-entity profit constitutes equity method goodwill of $4.7 million at June 30, 2022 that is subject to impairment analysis. No impairment was identified as of June 30, 2022.

Summarized financial information of the JV is as follows (in thousands):


Statement of Operations Data:	Twelve Months Ended March 31, 2022		Twelve Months Ended March 31, 2021
Revenue	$	55,190	$	33,054
Gross Profit	$	15,915	$	10,578
Net income	$	422	$	1,785
Net income attributable to the Company	$	241	$	872


Summarized Balance Sheet Data:	As of March 31, 2022		As of March 31, 2021
Assets
Current assets	$	71,730	$	24,703
Non current assets		21,754		23,089
	$	93,484	$	47,792
Liabilities and Stockholders' Equity
Current liabilities	$	61,877	$	16,854
Non current liabilities		1,055		1,467
Stockholder's equity		30,552		29,471
	$	93,484	$	47,792