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]
