Analyzing Profitability Measuring Income--Incentives for Disclosure Ideally: O Financial statements fairly present transactions and events 2 Accounting is neutral--not affecting how transactions and events are perceived 3 Methods chosen that are most applicable to the circumstances 4 Relevant information is disclosed--favorable and unfavorableAnalyzing Profitability Measuring Income--Incentives for Disclosure Ideally:  Financial statements fairly present transactions and events  Accounting is neutral—not affecting how transactions and events are perceived  Methods chosen that are most applicable to the circumstances  Relevant information is disclosed—favorable and unfavorable