Hank bought a small ranch for $300,000 in 2010.In 2016,oil is discovered on neighboring property.The county assessor re-valued Hank's property at $1,550,000.Hank does not recognize any income due to the

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Quizplus · Accepted Answer

The realization concept is the accounting concept that determines when revenue should be recognized, and it states that revenue should only be recognized when it is realized or earned. In this case, Hank did not realize any income as a result of the increase in the value of his property, as he did not sell or dispose of the property. The re-valuation by the county assessor does not represent actual income, but rather an increase in the fair market value of the property.

Hank Bought a Small Ranch for $300,000 in 2010