any unsold inventory as of December 31 could be valued at market price very objectively.
In this way, revenue can be counted for all wheat produced in a given year, regardless of whether it is sold or not. A decision not to sell this wheat before December 31 is based on speculation about future wheat price increases.
Second, the sales method (also called the delivery method) could be used. This approach would recognize revenue when the grain is purchased and received from the farm by the grain elevator operator in the neighboring town. In this instance, the owner of the grain elevator has just sold control to a Kansas City company with limited experience in running such a facility. The manager of the Grennell Farm had expressed some concern about selling to an unknown operator.
Third, the collection method could be used. Under this approach, revenue is counted when the cash is actually received by the farm from the grain elevator operator. Full collection often took several months because a grain elevator operator might keep wheat for a considerable time in the hope that prices would rise so the elevator company could sell at a higher price than that paid the farmer.