Investor Glossary-unrealized lossInvestor Glossary-unrealized lossInvestor Glossary-unrealized lossInvestor Glossary-unrealized lossInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Unrealized Loss

The HTML to link to this page
 

An unrealized loss is a loss on an investment that has not yet been effected, ie, a "paper loss." For example, suppose 10 shares of stock are bought at $8 per share on May 8. If on May 20 the stock price is $6, the unrealized loss is 10 X $2, or $20. The unrealized loss only becomes an actual loss when the stock is sold. An unrealized loss can have various implications for tax and business strategy. For example, investors often decide to convert an unrealized loss into an actual loss to offset realized capital gains and thus reduce their tax burden. On the other hand, companies are often required to disclose an unrealized loss (such as on marketable securities) in their financial statements. An unrealized loss poses major issues for accountants. Although an unrealized loss may theoretically exist only on paper, there may be little chance that the loss will be recovered. In that case, an auditor will consider an unrealized loss an actual loss for financial statement purposes.



Rate this unrealized loss definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: stock market close, quality assurance, reverse mortgage, Key Rate Duration, annual return, option premium, in escrow, VIX, Zero Cost Collar, ex-dividend date, deferred tax, limit order, cancelled check, open position, current ratio, labor relations, margin rate, wholly-owned subsidiary, retained earnings, implied volatility, diluted share, LIBOR, debt service coverage, APR, dividends payable, class C shares, liquidity ratio, 144a, minority interest, 1031 exchange, deferred revenue, inflation, covered put, balance sheet, phantom income, per diem, 401a, average price per share, risk management, required rate of return, FTSE, irrevocable trust, FICO score, stock split, EBITDA, ex-dividend, real GDP, 1035 exchange, command economy


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use