The rules that the FASB sets for recognizing gain contingencies and loss contingencies are an example of neutral, rather than conservative, accounting.

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The rules set by the FASB for recognizing gain contingencies and loss contingencies are an example of conservative accounting. This is because gain contingencies are not recognized until they are realized, while loss contingencies are recognized once they are probable and can be estimated, reflecting a conservative approach to ensure that financial statements do not overstate the financial position of a company.

The Rules That the FASB Sets for Recognizing Gain Contingencies