Realisation

1. Financial reporting.

The realisation concept in financial reporting requires that certain key events should have taken place before income and expenditure are recognised in the financial statements at the reporting date.

Cash does not necessarily have to have been received or paid by the reporting date, but risks and rewards of ownership have to have been transferred.

2. In other contexts, 'realisation' generally refers to the conversion of assets, profits or losses into cash.

See also

• Unrealised profit
• Accruals basis