Hank bought a small ranch for $300,000 in 2009.In 2013,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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The Realization Concept states that revenue should be recognized when it is earned and realized or realizable. In this case, Hank did not earn or realize any income from the increase in value of his property due to the oil discovery on the neighboring property. Therefore, he does not recognize any income even though his property was re-valued at a higher value.

Hank Bought a Small Ranch for $300,000 in 2009