What financial principle states that $1 today is more valuable than $1 a year from now?

The principle that states $1 today is more valuable than $1 a year from now is known as the time value of money, which is not directly associated with 'realization.' The time value of money reflects the concept that money available now can earn interest or generate a return, making it worth more than the same amount in the future due to inflation and the opportunity cost of not having that money to invest.

While realization refers to the recognition of income, its association with the value of money over time is not direct. It’s critical to understand this distinction: liquidity, equity, and amortization deal with different aspects of finance, such as the availability of cash, ownership value in an asset, and the payment of principal over time, respectively. The time value of money principle encompasses the basic understanding in finance that impacts decision-making and investment strategies.