Suvarna Garge (Editor)

Gain (accounting)

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In financial accounting, a gain is the increase in owner's equity resulting from something other than the day to day earnings from recurrent operations, and are not associated with investments or withdrawals. Typical gains refer to nontypical and nonrecurring transactions, for instance, gain on sale of land, change in a stock’s market price, a gift or a chance discovery.

Realized and unrealized gains and losses

Under US GAAP (US Generally Accepted Accounting Principles) a gain or loss is “realized” when the market value of an investment is designated to be held for trading, and such investment value increases or decreases: in this case the gain or the loss in question is reported in an income statement account.

The gain (loss) is instead called “unrealized” when the market value of an investment is designated to be held for sale, and such investment value changes: in this case it is reported in the Other Comprehensive Income of the income statement.

References

Gain (accounting) Wikipedia