Accounting Theory

Recognition and measurement in financial statements

In December 1984, the FASB issued Statement of Financial Accounting Concepts No. 5, "Recognition and Measurement in Financial Statements of Business Enterprises", describing recognition criteria and providing guidance for the timing and nature of information included in financial statements. The recognition criteria established in the Statement are fairly consistent with those used in current practice. The Statement indicates, however, that when information more useful than currently reported information is available at a reasonable cost, it should be included in financial statements.