We examine the implications of the presence of risky debt-which embeds an economic written put option on the firm (Merton 1974)-and mixed-attribute accounting for assets versus debt-an accounting option exercisable by accounting standard setters and/or firms preparing financial statements-for the empirical identification of conditional conservatism as asymmetry. We first conduct analytical and simulation analyses to develop a rich set of testable hypotheses about the effects of these two options on asymmetry. We then conduct archival empirical analysis to show that researchers can control for the riskiness of debt using measures of economic leverage, equity return volatility, and debt credit ratings. In this analysis we control for a measure of the percentage of economic assets that are recognized for accounting purposes and so are potentially subject to conditional conservatism. We find that, after controlling for declines in economic leverage and the asset recognition percentage over time, the upward trend in asymmetry is stronger and more monotonic than is the upward trend in the asymmetry for the overall sample that Basu (1997) documents.