Two criteria must be met:
1.Probable – likely the event will occur
2.Reliably measured – cost or value can be
accurately estimated
Two criteria have to met before you record a transaction
Probable – it is likely it will occur
-Debate in different accounting standards about what ‘probable’ means
-50%, 80%?
Reliably measured – can accurately estimate cost or value
-Again, there is debate about what an ‘accurate estimate’ is