Intermediate Accounting 4 The Income Statement and Income Recognition Transactional Approach Under this concept, a company records its net assets at their historical cost. and it does not record changes in the asset and liabilities unless a transaction. event or circumstance has occurred that provides reliable evidence of a change in valueTransactional Approach Under this concept, a company records its net assets at their historical cost, and it does not record changes in the asset and liabilities unless a transaction, event, or circumstance has occurred that provides reliable evidence of a change in value. Intermediate Accounting 4 The Income Statement and Income Recognition