I have made a similar time line for the transaction we have debated in class. A seller has purchased inputs and transformed them into a more valuable product (asset), enhancing the asset's value. The product sells at very high volumes at a predictable market price, so as management I am certain I will be able to sell all of the product at the market price when the market re-opens on 1/1/2017. Question: Why should I (or should I not) record the increase in my asset value, and record income, on 12/31/2017 for the increase in asset value? Are the economic impacts of the transactions different? Is there some other compelling reason why we should or should not do so? This is the first part of your assignment.

7/1/2016 Get rights to collect loan and interest; give up $ 12/28/2016 Get inputs (materials); give up $ Earn interest (discount) 12/31/2016 Fiscal Year-end Create value (transform) 12/30/2016 6/30/2017 Get $; give up rights to collect 1/1/2017 Get finished Product; give up $ Expect to get $; give up product 12/31/2016 Fiscal Year-end