The FASB’s conceptual framework states that an item should be recognized in the body of the financial statements only if it (1) meets the definition of a financial element (e.g., asset, revenue); (2) is measurable with sufficient reliability; (3) is relevant to users’ decisions; and (4) is reliable in the sense of being representational faithful, verifiable, and neutral (SFAC No. 5, para. 63). Items that fail to meet one or more of these criteria are candidates for disclosure.