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Gain (accounting)

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Title: Gain (accounting)  
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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 (Losses)

Under US GAAP (US Generally Accepted Accounting Principles) a gain (loss) is “realized” when the market value of an investment is designated to be held for trading, and such investment value increases (decreases): in this case the gain (loss) 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 increases (decreases): in this case the gain (loss) is reported in the Other Comprehensive Income of the income statement.[2]

See also


  1. ^ a b Roman L. Weil; Michael W. Maher (14 June 2005). Handbook of Cost Management. John Wiley & Sons. p. 69. ISBN . Retrieved 22 July 2013. 
  2. ^ a b Steven M. Bragg (28 January 2008). Wiley GAAP Policies and Procedures. John Wiley & Sons. p. 205. ISBN . Retrieved 22 July 2013. 
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