Project Finance - Fixed Asset Installation Expenditures extending beyond COD

I have a very atypical scenario in a project finance model where one of the sponsors of the project is also one of the owners of one of the vendors (stakeholders) of the project and thus for cash flow purposes for the project has agreed to a payment schedule for the vendor that extends beyond the commercial operation date (beneficial use) of the asset. Essentially perform the work and float (although won’t be any interest or note involved) some of their payment until after the asset is in service. This creates an accounting issue with regards to recognition and depreciation that I haven’t been able to find a solid GAAP passable answer on. Using a much-simplified example of the situation below:

A project to install a fixed asset costs $100. The asset owner enters into a fixed contract with a vendor to install this asset for $100. It takes 2 months to install and have beneficial use of the asset. Commercial operation of the asset begins first day of month 3. In the contract with the vendor, the payment schedule will be $50 in month 2 and $50 in month 16, even though all of his work is completed by the end of month 2. In thinking about this issue, I came up with two options: Option 1: Depreciation starts in month 3 for $50 (assuming not salvage value). In month 16, the fixed asset book value is increased by $50 and the remaining years of depreciation are recalculated. The issue with this though is that this additional capital expenditure at month 16 did not increase the capacity of the equipment or extend its useful life.

Option 2: Depreciation starts in month 3 for $100 as the owner has entered into a contract with the vendor and the vendor has performed all the work, therefore incurring the total $100 liability even though only $50 of the contract has been paid by the time asset is turned on for beneficial use. The remaining $50 goes into some type of “Other Liability” account that gets extinguished at month 16 when payment is made. Thinking an Other Liabilities account would be more appropriate than AP and notes payable since it’s an extended time, yet doesn’t have any interest bearing feature tied to it.

I’m thinking option 2 is more appropriate and obviously more beneficial to the asset owner. Although I haven’t been able to verify it would be GAAP compliant. Any input/insight would be very much appreciated.

Thanks