This study examines trend of matching between revenues and expenses over time and across industries and identifies determinants of the matching. The identification of the determinants is explored in two dimensions: components of expenses and firm characteristics. Since Paton and Littleton (1940), the matching principle has been implemented such that efforts (expenses)are matched against accomplishments (revenues) to generate accurate net income for a period. A successful business is an outcome of arbitraging prices between input and output markets in a conventional sense. Theoretically, all expenses should be matched against goods sold or service rendered. In practice, however, we cannot observe the perfect matching due to such inevitable factors as intensive investments and fixed costs, managerial discretion or specific sets of accounting principles (Dichev 2008). They introduce subjective estimates or arbitrary allocation into financial information. In addition, as the measurement of assets or liabilities is shifted from historical cost to fair value and net income is measured as the difference between beginning and ending equity, the importance of the matching principle becomes significantly diminished. Thus, it is important to investigate how the matching between revenues and expenses has been changing over time and different across industries and what has affected the matching. The sample consists of 10,483 non-banking firm-years that are traded over Korean Stock Exchange for 1983-2008 with non-missing data that are used in empirical analysis and collected from KIS-Value database. I find that the matching of contemporaneous association between revenues and expenses gradually deteriorates over the sample period as consistent with Dichev and Tang (2008). The contemporaneous association between revenues and expenses has declined from 1.063 (over 1983-1991) to 0.830 (2002-2008). Poor matching is severe in industries including chemicals and chemical products manufacturing, pharmaceuticals,medicinal chemicals and botanical products manufacturing, and electrical equipment manufacturing. The contemporaneous relations between revenues and three components of expenses (i.e.,cost of goods sold, selling, general, and administrative expenses, and non-operating expenses)have been weakened over time. Further, poor matching is driven mainly by loss, depreciation and amortization expenses, and discretionary accruals. About 10% of the sample firms report losses in 1980s, but slightly less than 20% of the sample firms experience losses in 2000s. This suggests that there is an increasing tendency of conservatism over the sample period. It is known that fair-value accounting is preferred because it mitigates information asymmetry between information providers and users. Under fair-value accounting that measures earnings as the change in assets and liabilities at two points in time, the proper matching between revenues and expenses will not be guaranteed. To the extent that International Financial Reporting Standards are principle-based, it is generally anticipated that managerial discretion will be even increasing and as a consequence, the matching will deteriorate further. When a firm’s performance is based on fair value that is not controllable by managers, accounting information may not play an important role in evaluation managerial stewardship. Also, we should change our perspective on a successful business model that is no longer to arbitrage between input and output prices. The result in this study principle provides policy implication for setting or revising accounting principles in the future. It also provides a chance to review the adequacy of discarding the matching principle in the perspectives of practitioners and regulators. In any event, the controversy over the usefulness of fair-value accounting will continue. Accordingly, more research is needed to investigate what is gained or lost from adopting fair-value accounting at the expense of historical cost principle including the matching principle.