Abstract It is becoming increasingly difficult to discuss the concept of realization intelligibly. The Concepts and Standards Research Study Committee report does not conform to current practice. Current practice recognizes some unrealized elements and rejects other unrealized elements that can be measured with equal objectivity. In practice realization may be a rather imprecise descriptive term that is generally understood, but clearly it is not a crucial criterion in the recognition of changes in assets and liabilities. The author's own view is that in establishing criteria for the recognition of revenues the concept of realization is awkward, causing confusion rather than creating clarity. It is doubtful that the concept can be described to include all the revenues that belong in the measurement of periodic income and to exclude all others. The concept may be useful in reference to nor revenue changes in assets and liabilities, that are, in distinguishing between realized and unrealized holding gains and loss In this regard, however, perhaps an exchange transaction involving objectively measurable assets would suffice.
Robert T. Sprouse (Thu,) studied this question.