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Revenue recognition and measurement can conflict with liability recognition and measurement. We explore here under different market conditions, where consideration is received in advance of performance, when the two measurement approaches coincide and when they conflict. We show that where entities expect to earn ‘super-profits’—i.e. profits that cannot be regarded as ‘factor costs’ in the way that 'interest' and 'reward for risk bearing' may—the conceptual conflict is exacerbated by the adoption of ‘fair value’ (FV) as the measurement basis for assets and liabilities rather than the more theoretically grounded approach of ‘deprival value/relief value’ (DV/RV) that better reflects the impact of, and rational management response to, varying market conditions. We show that the balance-sheet liability and the revenue recognition problems, and the problems of income statement presentation, can be resolved by the application of DV/RV reasoning. However, this is not sufficient fully to resolve issues of the appropriate timing of profit recognition. Performance measurement issues still need to be addressed directly. The standard setters’ current ‘revenue recognition’, ‘insurance contracts’, and ‘measurement’ projects therefore need broadening to consider the pervasive issue of accounting for internally-generated intangibles.
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Stored only when both papers are in the corpus — 11 citations exist upstream.
Papers that cite the same references — the relational fallback while embeddings are still backfilling.
Imported from OpenAlex (CC0) — nothing here is generated.