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 a 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 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 $3.9 million and $2.1 million of intra-entity profit margin as of September 30, 2021 and June 30, 2021, respectively. During the three months ended September 30, 2021, the Company recognized $0.2 million of previously deferred intra-entity profit margin from sales and recorded intra-entity profit margin deferral of $1.9 million from sales executed during the period. During the three months ended September 30, 2020, the Company recognized $1.0 million of previously deferred intra-entity profit margin from sales and recorded intra-entity profit margin deferral of $0.7 million from sales executed during the period. The Company’s consolidated accumulated deficit includes $0.4 million of accumulated losses related to the Company’s equity method investment.

As of September 30, 2021, the Company had carrying value of $14.7 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 $13.9 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 $0.9 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 $0.8 million increased by $3.9 million eliminated intra-entity profit constitutes equity method goodwill of $4.7 million at September 30, 2021 that is subject to impairment analysis. No impairment was identified as of September 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):

	Three Months Ended June 30, 2021			Three Months Ended June 30, 2020
Statement of Operations Data:
Revenue	$	7,669		$	3,917
Gross Profit		2,340			1,184
Net loss		(693	)		(58	)
Net loss attributable to the Company		(340	)		(28	)

	As of June 30, 2021		As of June 30, 2020
Summarized Balance Sheet Data:
Assets
Current assets	$	31,759	$	23,314
Non current assets		22,763		17,287
	$	54,522	$	40,601
Liabilities and Stockholders' Equity
Current liabilities	$	24,445	$	15,934
Non current liabilities		1,300		1,397
Stockholder's equity		28,777		23,270
	$	54,522	$	40,601