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Answer to Question #64809 in Accounting for Jay

Question #64809
What are realized gains/losses?
What are unrealized gains/losses?

When is each kind calculated, and where are they reported on the financial statements?

Do you think the reporting requirements of these gains/losses adds to or detracts from the users' of financial statements understanding of the company?
Expert's answer
A realized gain/loss results from selling an asset at a price higher/lower than the original purchase price.
An unrealized gain/loss occurs when a stock increases/decreases after an investor buys it, but he or she has yet to sell it.
Only realized gains/losses are reported on the financial statements.
I think that the reporting requirements of these gains/losses adds to the users' of financial statements understanding of the company.

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