The Concept of Realization: A Useful Device.

Abstract Realization is a controlling concept in the measurement and reporting of enterprise income. In its broad meaning, it includes all of the possible points in the activity of the enterprise at which revenue may be viewed as having emerged or been realized. However, the broad meaning cannot he applied to specific situations. A specific point of realization must be selected from all of the possible points. This article suggests that there are several important points of realization that produce several different, significant and useful measure of income and that the selection of any single set of tests in the hope of producing the appropriate income measure unnecessarily restricts accounting to serving only those purposes which that single measure tends to accommodate. Realization should not be viewed as a restraint that requires an either point of recognition. It should be regarded as a useful device that permits accountants to observe, measure, and report on the enterprise from several points of interest.