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Realized vs. Unrealized

Realized business gains and losses cover those transactions that are completed, such as the revenue from merchandise sales that customers have already paid for. In contrast, an unrealized gain or loss relates to transactions that are incomplete but for which the underlying value has changed since the last reporting period. A common example is when you invest company cash in stocks you still hold that can be sold fairly quickly and effortlessly. To illustrate, suppose you purchase stock for $20,000 that’s worth $30,000 at the end of the reporting period. If you haven’t sold the shares yet, this $10,000 gain is unrealized until you actually trade the shares.

Statement of Comprehensive Income

References

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