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 consisting of two full radiation oncology systems from the Company’s inventory in the quarter ended December 31, 2019. The investment is reported as an Investment in joint venture on the Company’s consolidated balance sheets. The Company recognized a gain of $13.0 million related to the value of the capital contribution to the JV. This gain was recorded as non-operating, other income in the year ended June 30, 2020.

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, eliminating a portion of profit to the extent goods sold have not been sold through by the JV to an end customer at the end of such reporting period. The Company deferred $2.1 million and $1.8 million of intra-entity profit margin as of June 30, 2021 and June 30, 2020, respectively. During the year ended June 30, 2021, the Company recognized $1.8 million of previously deferred intra-entity profit margin from sales and recorded intra-entity profit margin deferral of $2.1 million from sales executed during the period. The Company’s consolidated accumulated deficit includes $0.9 million of accumulated income related to the Company’s equity method investment.

As of June 30, 2021, the Company had a carrying value of $15.9 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 $13.7 million. The difference of $2.2 million increased by $2.1 million eliminated intra-entity profit constitutes equity method goodwill of $4.4 million at June 30, 2021 including $0.1 million impact of foreign currency exchange and is subject to impairment analysis. No impairment was identified as of June 30, 2021.

Summarized financial information of the JV is based one-quarter lag due to the timing of the availability of the JV’s financial records is as follows (in thousands):

	Twelve Months Ended March 31, 2021		Six Months Ended March 31, 2020
Statement of Operations Data:
Revenue	$	33,054	$	13,764
Gross Profit	$	10,578	$	2,960
Net income (loss)	$	1,785	$	(306	)
Net income (loss) attributable to the Company	$	872	$	(149	)

	As of March 31, 2021		As of March 31, 2020
Summarized Balance Sheet Data:
Assets
Current assets	$	24,703	$	16,776
Non current assets		23,089		16,125
	$	47,792	$	32,901
Liabilities and Stockholders' Equity
Current liabilities	$	16,854	$	9,064
Non current liabilities		1,467		1,412
Stockholder's equity		29,471		22,425
	$	47,792	$	32,901