Gain (accounting)

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.[1] Typical gains refer to nontypical and nonrecurring transactions, for instance, gain on sale of land,[1] 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.[2]

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.[2]

See also


  1. 1 2 Roman L. Weil; Michael W. Maher (14 June 2005). Handbook of Cost Management. John Wiley & Sons. p. 69. ISBN 978-0-471-72263-2. Retrieved 22 July 2013.
  2. 1 2 Steven M. Bragg (28 January 2008). Wiley GAAP Policies and Procedures. John Wiley & Sons. p. 205. ISBN 978-0-470-15129-7. Retrieved 22 July 2013.
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