While you are logically correct, I believe the issue hinges on whether an asset has ever been written down or not. From limited experience with the situation (I’m not an accountant, but I occasionally have to play one on tv), if an asset has been written down and a loss taken through income, a subsequent increase in fair value can not be recognized through income. Essentially it’s considered an impaired asset and is accounted on cash accrual basis, meaning actual cash flows have to be recognized when received to offset the previous write down. I’ve only seen specific cases of debt securities, and that doesn’t directly apply to the situation at hand. But it’s not an unfamiliar accounting concept. To me, it would hinge on the initial treatment of the asset value, which could be very specific to unsalable inventory.

Again, I’m not an accountant, this is just my perspective and experience. If we don’t get an answer from the board I can run it by some actual accountants.